Hyundai says long-term demand for cars to depend on overall economic situation3 min read . Updated: 05 Nov 2020, 04:11 PM IST
Hyundai Motor India MD has said that as per the carmaker's market research, around 10 lakh people have either postponed or decided against buying a car due to uncertain market conditions.
Hyundai Motor India remains cautiously optimistic regarding the domestic market as it expects a pent-up demand to drive sales for the next few quarters but believes that the long-term pull in the market would depend upon the overall macroeconomic situation, according to a top company official.
The country's second largest passenger vehicle maker noted that factors like shift towards personal mobility from shared and public transport due to the pandemic would keep fuelling the demand in the short term.
“As per our market research, around 10 lakh people have either postponed or decided against buying a car due to uncertain market conditions due to the pandemic situation. So this pent-up demand will be there, already we have seen some of that demand in the second quarter. This pent-up demand would continue in the coming quarters as well," Hyundai Motor India MD and CEO SS Kim told PTI.
The demand would be there at least till the first quarter of next year, he noted.
“But in the end, the overall market situation will be determined by macroeconomic indicators like GDP growth etc. It will have an impact on the demand. Then there is also worry about the second wave of coronavirus, so we remain cautiously optimistic," Kim said.
The company will move quickly to make changes according to the market situation if required, he added.
Kim noted that despite short-term challenges, India remained a very strong automobile market.
“Considering the lower penetration of cars in India, from a long- term perspective I think India has huge growth potential as far as new car demand is concerned. In the short term, we might have few uncertainties but from a long-term perspective the market remains intact," he said.
He said the company continues with its investment plans in the country, including new product development and other related initiatives.
“Even during the pandemic period we continued to invest in developmental activities for new segment vehicles and new affordable electric vehicle. There can be some changes in timelines but we will continue with the development process," Kim said.
(Also see pics of 2020 Hyundai i20)
When asked if a lower GST rate would help the auto industry, Kim noted: “Different countries have different taxation systems, so we fully understand the government's position. Under the current taxation structure we are doing our best to give some better offers to customers. But in case of slump due to sluggish demand, if the government takes some activity in the area of taxation or economic boost, that will be very helpful."
He added that the industry would take around three years to reach 2018-19 level in terms of sales.
When asked if the company would be able to manage with the current production capacity at its Chennai plant, he said it was enough for the time being to take care of domestic and export requirements.
“If we come to a conclusion that the market demand is more, then we can immediately start a feasibility study. Under the current situation, the capacity is enough to meet the demand including the exports," Kim said.
On plans for a new manufacturing plant, he noted: “We are very carefully and cautiously monitoring the market trend. We internally studied various options. Wait for some time for that."
At the collaboration regarding a battery manufacturing plant, Kim said: “We are having some negotiations with some potential partner, so we are studying a lot of options. We might be having some final conclusion in the coming quarters."
On the entry level hatchback segment, he said the Santro sales were improving and the company had no immediate plans to add another product in the vertical.
Hyundai on Thursday launched all new i20 in the country, priced between ₹6.79 lakh and ₹11.17 lakh (ex-showroom).
This story has been published from a wire agency feed without modifications to the text.