Expect To See Significant Growth In Less Than ₹10 Lk Segment: Hyundai Motor India | SIAM 2025

Summary

In an exclusive CNBC TV18 interview at the 65th CM Conference, Hyundai Motor India’s COO Tarun Gag discusses the positive impact of recent GST reforms on the automotive industry. Highlighting a surge in bookings across both rural and urban markets, he anticipates a festive season growth of around 5%. Tarun also emphasizes the company's strong export performance, the upcoming Pune plant expansion, and evolving consumer preferences toward EVs, hybrids, and feature-rich SUVs. With sub-10 lakh vehicles and first-time buyers driving demand, Hyundai aims to leverage the GST benefits and new product cycles to capture growth across all segments, including electrification and aspirational upgrades.

Takeaways

• 😀 Hyundai Motor India appreciates the GST reforms, believing they will boost both the economy and the automotive sector.
• 😀 Initial response to the GST cut has been very positive, with strong enthusiasm from dealers and customers, leading to increased bookings.
• 😀 The festive season, starting with Navaratri and followed by Diwali, is expected to see around 5% growth in car sales compared to the previous year.
• 😀 Rural markets have shown strong growth in recent years, with Hyundai’s rural penetration increasing from 19% to 23%, and SUV demand in rural areas now matching urban levels.
• 😀 Exports have been a key growth driver, showing double-digit growth (12.5% from April to August) and expected to continue, complementing domestic growth.
• 😀 Hyundai’s new Pune plant, with a capacity of 170,000 units, will start operations in Q3 FY 25-26, boosting overall production to nearly 1 million units.
• 😀 GST cuts reduce the cost of smaller cars, attracting new first-time buyers and potentially increasing the share of first-time buyers to 42-43%.
• 😀 Customers may move back to higher trims due to increased affordability, with greater demand for features like connectivity, sunroofs, better audio systems, and ADAS technology.
• 😀 EV adoption in India is growing, with August penetration reaching 6%; Hyundai plans to expand EV infrastructure, including DC chargers and launching 26 new models with hybrid and EV options by FY 30.
• 😀 Hyundai sees significant potential in the sub-10 lakh INR segment, particularly SUVs, which combine affordability with aspirational features, and currently contribute 60% of sales.

Q & A

How has Hyundai Motor India responded to the recent GST reforms?

Hyundai Motor India welcomed the GST reforms, particularly the 10% reduction for cars under 4 meters, seeing it as a significant boost to both the economy and the automotive sector. The reforms are expected to increase sales momentum and consumer enthusiasm.

What impact are the GST cuts expected to have on festive season sales?

The GST cuts are expected to positively influence bookings and demand during the festive season (Navaratri and Diwali). Hyundai anticipates a swing from -2% growth (Apr–Aug) to approximately +5% growth from September onwards.

How is rural demand contributing to Hyundai’s overall sales?

Rural penetration has increased from 19% to 23%, with SUVs contributing equally in rural and urban areas. Early festive season bookings show positive upticks in both rural and urban markets.

What growth trends has Hyundai observed in exports for FY26 so far?

Hyundai has reported double-digit export growth of approximately 12.5% from April to August. The company expects sustained export growth, which, combined with domestic market recovery, will create a 'double engine' growth effect.

When is the Pune plant expected to start production, and what is its capacity?

The Pune plant is expected to start in Q3 of FY26 with a phase-one capacity of 170,000 units, increasing Hyundai’s total production capacity to nearly 1 million units.

How is the GST reform affecting electric vehicle (EV) and hybrid car adoption?

GST reforms have reduced the cost differential between EVs, hybrids, and ICE vehicles in smaller cars. EV penetration has already increased from 2.4% to 6% as of August, supported by expanding charging infrastructure.

What is Hyundai’s outlook on first-time car buyers following the GST changes?

First-time buyers at Hyundai have increased from 31% in 2020 to 39.5%, and the company expects this to potentially rise to 42–43% due to affordability improvements from the GST cuts.

Which segments does Hyundai expect to focus on aggressively post-GST?

Hyundai plans to focus on the sub-10 lakh segment, particularly SUVs and small cars, offering features like connectivity, ADAS, sunroofs, and automatics to appeal to aspirational buyers.

How are Hyundai’s tax brackets distributed across its vehicle portfolio?

Currently, 60% of Hyundai’s portfolio falls in the 18% GST bracket, while 40% falls in the 28% bracket. The sub-10 lakh segment is expected to see substantial growth due to affordability and features.

What strategic measures is Hyundai implementing to boost EV adoption in India?

Hyundai is expanding its EV and hybrid portfolio with 26 new models/upgrades by FY30, developing extensive charging infrastructure (950+ DC chargers with a goal of 600 more by 2032), and targeting aspirational customers with enhanced features and connectivity.

How has Hyundai’s SUV contribution changed in rural areas?

SUV contribution in rural areas has grown to match urban levels, reflecting strong rural demand driven by infrastructure improvements, favorable monsoons, and increased consumer affordability.

What is the expected overall industry growth in India post-GST?

Industry growth is expected to swing from -2% (April–August) to around +5% from September onwards, with potential for up to a 7% improvement in the coming months.