Only govt can improve market sentiment, says Hyundai CEO on auto slowdown

I have gathered that the slowdown is primarily related to poor customer sentiment in a poor economic scenario, says S S Kim

South Korean automaker Hyundai is looking to stir up customer sentiment by introducing a new compact car, even as sales in the auto sector remain at an all-time low. In an interview with Arindam Majumder, the company’s Chairman and Managing Director S S Kim explains the reasons for the slowdown and the mode which could lead to recovery. Edited excerpts:

Why are you launching the Grand i10 Nios at a time when there is a palpable gloom?

The market downturn can be changed only through efforts by both government and auto companies. I think to make a customer more comfortable towards purchasing is to bring a new product. The Grand i10 Nios launch is part of that initiative.

This is a new-designed vehicle. We expect that the new features in the car will help it stimulate the market.

In July 2019, the Venue received a tremendous response. We sold close to 39,000 units, of which 9,585 units sold were of the Venue. Despite current market challenges, Hyundai has been the only brand to maintain its leadership position and has increased its market share by 3 per cent, registering a 19.4 per cent market share in July 2019. 

Can you explain the reason for such a prolonged slowdown in the auto sector?

I am here (in India) for just seven months but I have gathered that the slowdown is primarily related to poor customer sentiment in a poor economic scenario. A lot of burdens have been added by the government whether locally or centrally — like the hike in insurance premium and registration fees, and the increase in road tax.  

When do you see market sentiment improving?

It will take time. Because a change in the customer’s mindset will take some time. But if the government comes out with some measures, a change in sentiment will be faster. Everybody is now expecting the government to step in. The credit situation should be improved immediately.

Will the second half of the year be better or it will be a washout?

As I said, if the government takes some steps, there will be some recovery in this year itself.

Are you re-looking at the expansion plan of your Sriperumbudur plant?

Depending on the government’s steps and the demand, we will take a call on it. 

Will BS VI norms be an impediment in reviving sentiment next year? 

It may be a challenge, but I think the potential new customers will be attracted by the new models, which will be launched under the BS-VI umbrella.

Is the launch of the Grand i10 Nios a sign of the company will be more focussed on the compact segment? You have done well in the SUV segment.

Compact cars are the number one segment in India. A lot of Indian customers considers this segment for their first car. We want to strengthen our compact segment.