What are the factors that has led the Korean car brand, which has had a steady grip over the No.2 slot in India's car market, to lose its dominance in recent months?
07 Apr 2025 | 1646 Views | By Sreejith Rajan
Hyundai Motor India Ltd (HMIL), the long-standing second-largest car seller in the country, is facing intensified competition, reflected in its retail sales performance over the past two months. We look at what could be leading to this setback for the Korean car brand.
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Hyundai Motor India Ltd (HMIL), the long-standing second-largest car seller in the country, is facing intensified competition, reflected in its retail sales performance over the past two months. We look at what could be leading to this setback for the Korean car brand.
According to data released by the Federation of Automobile Dealers Associations (FADA), Hyundai slipped to the fourth position in passenger vehicle retail sales in both February and March 2025, ceding ground to domestic rivals Tata Motors and Mahindra & Mahindra.
This marks a significant shift in the competitive landscape, occurring despite Hyundai's recent blockbuster Initial Public Offering (IPO) and its strong performance in wholesale dispatches. In March 2025, FADA figures show Hyundai retailed 42,511 units, placing it behind market leader Maruti Suzuki, Tata Motors (48,462 units), and Mahindra & Mahindra (46,297 units). This follows a similar trend in February 2025, where Hyundai sold 38,156 units, trailing both Tata (38,696 units) and Mahindra (39,889 units).
This dip in retail rankings comes after its highly successful IPO, which underscored strong investor confidence in the company's long-term prospects in the lucrative Indian market. However, the recent retail figures highlight the immediate challenges on the ground. Let's delve into some potential reasons behind this shift:
Some of these, such as the lack of a strong EV portfolio, are likely to be addressed in the coming months, as the company raised Rs 27,870.16 crores last year in India's largest IPO. This provides capital for expansion, including EV development and new facilities. Another factor that may play in Hyundai's favor in the coming months could be a swing away from SUVs to hatchback, although this is more likely to benefit Maruti Suzuki than Hyundai, which has gradually shifted its focus to more and more premium models such as the Creta over the last three years.
Dropping to the fourth position in retail sales for two consecutive months is a point of concern for the Korean automaker, which has held the No. 2 spot for years.
Interestingly, Hyundai may be able to take a leaft out of sister brand Kia's playbook in India. Despite encountering a speed bump in FY24, Kia, partly owned by Hyundai, has been more successful in keeping its line-up exciting and fresh, with models like the Seltos and Carens. Kia's willingness to take risks and launch innovative products may have helped the Korean brand, and could hold valuable lessons for Hyundai, which has largely been associated with practicality and value for money.
While the recent IPO success reflects long-term confidence, the immediate task for Hyundai will be to analyze these retail trends and strategize effectively. Leveraging its strong brand equity, extensive network, and popular models like the Creta and Venue, while potentially accelerating new launches or strategic interventions in competitive segments, will be key to reclaiming its traditional position in the fiercely contested Indian passenger vehicle market.