Hyundai's journey in India has been through SUVs
₹25,000 crore, its initial public offering (IPO) is slated to be the biggest-ever IPO to hit the Indian markets. Its core investment premise is the fundamental shift that has unfolded in the Indian passenger vehicle market and Hyundai’s place in it. By revenue, Hyundai Motor is the third-largest passenger vehicle company in India, behind Maruti Suzuki and Mahindra and Mahindra, with revenues of ₹60,310 crore in 2022-23 and ₹52,158 crore for the 9-month period ended December 2023.
With 13 models currently, Hyundai India has an overall market share of 14.6% in passenger vehicles, just ahead of Tata Motors Ltd's 14%, but well behind market leader Maruti's 41.3%. Its operating margin at 9.1%, however, is ahead of Maruti's. M&M is ahead of both, but its numbers include tractors.
But if there is one story the Hyundai prospectus tells, it is of the ‘premiumisation’ of the Indian passenger vehicle market in the last few years. The average price of a passenger vehicle has risen from ₹4.9 lakh in 2018-19 to ₹6.6 lakh in 2022-23. “Modern consumers in India are preferring mid-end or top-end version of vehicles, moving away from traditional fuel-efficient, budget-friendly small cars and towards higher-priced feature-loaded larger cars," Hyundai says in its IPO document.
A key outcome of this move to premium vehicles has been soaring sales in the sports utility vehicle (SUV) segment, which now accounts for over half the passenger vehicle market by volume, against 23% just six years ago. The story of SUVs, which have higher profit margins, is of both demand and supply. As per Hyundai's prospectus, the industry has launched over 30 SUV models in the last five years, compared with just four hatchbacks and three sedan models.
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