Hyundai Motor India, which gets a major chunk of its Sports Utility Vehicle (SUV) sales from rural markets, believes it will continue to derive higher volumes of its premium Alcazar model from urban cities.
A senior official of the South Korean carmaker asserted that Alcazar, which has been facelifted, the company aims to attract customers who are looking to upgrade to three-row SUVs from midsized ones like Creta.
“While 67 percent of our total SUVs in non-urban markets are from non-urban markets, there's a 2 percent difference (in contribution) between rural and urban customers for this model. Alcazar is slightly more urban than rural, but the gap is not huge,” said Tarun Garg, COO of HMIL.
Alcazar revamped
Garg revealed that on a monthly basis company sells around 2,000-2,500 units of Alcazar, which was revamped at a starting price of Rs 14.99 lakh (ex-showroom), lower than Rs 16.78 lakh of the outgoing version (ex-showroom).
“There was very clear customer feedback coming that many of them, because of their lifestyle, want to buy a three-row SUV. They were unable to do it because of the lack of entry-level options. That is why we have brought this entry-level option,” he said. He noted that unlike the Creta midsized SUV, diesel-driven versions account for 60 percent of the Alcazar sales.
“Creta is more of a self driven car (as) the less than 10 percent of (customers) are chauffeur driven, whereas Alcazar is about 25 percent chauffeur driven, so I think that is a very big difference,” said Garg.
The share of premium midsize SUVs, in which Alcazar falls, within the overall SUV sales has gone up to 14.7 percent in FY24 from 12.7 percent in 2021, he said.
Hyundai Motor India on Monday said its SUV portfolio accounts for 67 percent of its overall sales, surpassing the industry average of 53 percent.
“Out of our total sales, 67 percent are SUVs. But the more important factor is, in urban areas also, 67 percent of the sales are SUVs. In rural areas also 67 percent are SUVs. Five years back there was a big difference between the rural and urban portfolio of products, but over the past one-and-a-half, two years, there's a sharp jump in the aspirations of the rural customers.”
Garg said the revised pricing for Alcazar would allow a new set of buyers into the company's fold. He noted that Alcazar is the company's eighth model to come with Advanced Driver-Assistance Systems (ADAS) features.
Inventory levels stable
Meanwhile, Garg said that its stock level is stable. “Our inventory… very clearly, we have gone on record to say that we have always work with four weeks of physical inventory with dealers. Before the festival season, some plus or minus would happen. Our inventory, at the end of last month, was also four weeks,” he said.
HMIL, in June this year, had filed a draft red herring prospectus with the Securities and Exchange Board of India to divest around 17.5 percent stake to institutional and retail investors. While Garg refused to comment on any questions related to the IPO, Moneycontrol had earlier reported that the company is looking to raise anywhere between Rs 20,000 crore and Rs 25,000 crore.
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