Hyundai’s unique selection was to not launch Santro as its first automotive however the mid-sized sedan, Accent. However, there was a strategic rethink and the corporate selected to first construct volumes after which transfer up the product chain. Rest, as they are saying is historical past.
Today, the product which outlined the corporate’s success within the Indian market, is being phased for the second time due to very low month-to-month volumes – round 1,500 models.
BVR Subbu, former president of Hyundai Motor India, who was the strategist behind first launching Santro as an alternative of Accent, has an attention-grabbing tackle the phasing out of the automotive at this level of time.
“Am sure this decision to phase out Santro is to retool its platform to produce electric vehicles instead. Santro sells low volumes and makes less money. EVs are emerging products and by retooling its platform, Hyundai would be able to make a splash in the EV market at a much lesser investment than any other manufacturer,” Subbu stated.
“I am sure, Hyundai would retool the platform to produce its Ioniq 5 EV and Kia Motor’s Kia EV6. These two would give it a leadership position in the EV space very fast,” he added.
Subbu’s evaluation appears proper. Hyundai’s technique of phasing out a product when its time is over by a product whose time has come, might yield it wealthy dividends identical to Maruti did with its first automotive 800 by changing it with Alto.
Maruti 800, which was launched in mid-80s and redefined motorisation in India, was phased out fully in 2014. At that point it had bought 2.8 million models. Alto, an analogous however extra modern and stylised automotive which was launched in 2000, had clocked in 4 million models by 2020.
“Alto can appropriately be termed a worthy successor of the successful Maruti 800”, says RC Bhargava, chairman, Maruti Suzuki India.
Santro was launched in 1998 and had bought a complete of 1.3 million models earlier than it was phased out in 2014. A brand new Santro was launched by Hyundai in August 2018 however didn’t click on in its second coming. Here once more, there’s a parallel with Maruti which phased out its as soon as standard Zen, changed it with Estilo, which failed and was subsequently phased out.
Auto sector analysts will not be shocked on the information of Santro being phased out as the marketplace for vehicles has completely modified. “The average car-buying age is coming down, and younger buyers, in general, prefer good driving dynamics, customisation and a lot of technology features on the dashboard over traditional features such as good fuel efficiency,” Som Kapoor, companion, automotive sector, EY India, stated.
“Margins are low, and you need to sell in high volumes to recover investment costs. I doubt any carmaker will develop an all-new entry-level hatchback in the near future,” Gaurav Vangaal, affiliate director, mild car forecasting, S&P Global Mobility, stated.
The perspective of entrepreneurs and model consultants on the part out of Santro can also be fairly related. “Santro when it was first launched was an improve over the prevailing entry-level Maruti 800. So, two-wheeler homeowners seeking to purchase a automotive for the primary time would go for the Santro because it supplied extra space, type, consolation and low upkeep/operating price at an reasonably priced price-point, in response to Samit Sinha, managing companion, Alchemist Brand Consulting.
“It was a revolutionary launch, a massive upgrade over the Maruti 800, without a corresponding huge delta in the pricing,” Sinha stated. “When it was relaunched in 2018, the company made the classic mistake of assuming the market was the same when it had left,” he added.
According to Sinha, the advertising and marketing world has seen a number of manufacturers failing to innovate in time, and part out progressively. When they relaunch, making an attempt to ape market tendencies, it may very well be too late.
“Classic examples include Nokia and Blackberry. They have tried to relaunch, but they both know they missed the touchscreen smartphone bus and the Android bus,” Sinha stated.