Hyundai to enter electric vehicle race in India with Ioniq brand

New Delhi: Hyundai Motor India Ltd will introduce its electric vehicle brand Ioniq in India to tap into India’s ambitious plans to have an all-electric fleet in the country by 2030.

Ioniq, the brand under which the South Korean car maker sells electric, hybrid and plug-in hybrid cars globally, is expected to be showcased at the forthcoming Auto Expo scheduled to be held in February 2018, two people privy to the matter said.

Hyundai sells Ioniq in the US, Europe and East Asian markets.

“We will bring electric cars to India and will meet the timeline given by the Union government. Hyundai has the technology required for electric vehicles so we will bring them in all the segments we are present,” Rakesh Srivastava, director, sales and marketing, Hyundai Motor India, said in an interview.

He, however, declined to comment on the introduction of the Ioniq brand in India.

The move comes days after an announcement by Suzuki Motor Corp. on 17 November where the Hamamatsu-based car maker said it will manufacture electric cars for India and supply some units to Toyota Motor Corp. with technical support from the latter. The first electric car from Suzuki, which has a 56% stake in India’s largest car maker Maruti Suzuki India Ltd, is expected to be introduced in the country in 2020.

“We will surprise the market (when it comes to electric vehicles),” Srivastava said.

Through a policy-driven move the Indian government has compelled Indian car makers to launch electric cars in the country leading to frenetic activity in the space after the state-controlled Energy Efficiency Services Ltd invited bids to procure 10,000 cars. The bidding process witnessed cut-throat competition between Tata Motors Ltd and Mahindra and Mahindra Ltd. Tata won the tender, which was matched by Mahindra later forcing EESL to award the tender to both companies. EESL has said it will come out with another tender to procure 10,000 more electric vehicles around April 2018.

An analyst remained sceptical of Hyundai’s move.

“Any manufacturer bringing these vehicles to India will essentially be showcasing models. As of now we don’t have a market for pure electric vehicles. Since the government is serious about pushing electric vehicles in the market auto makers are trying to hedge their positions,” said Anil Sharma, principal analyst, IHS Markit.

For Hyundai, India is now the third largest market after the US and China. Hence, the company will leave no stone unturned to maintain its volumes and most importantly maintain its profitability in India, Srivastava said.

“Growth for Hyundai is not like a sine curve. We grow every year whether or not we launch new models. We are probably the only auto company where the growth in the top line is more than the growth in the volumes. Due to the capacity constraint in the Chennai plant our volumes did not grow as much as we would have liked,” Srivastava said.

In the current year, Hyundai plans to manufacture 6.72 lakh vehicles and can stretch its capacity by another 30,000 units in the next year.

During April-October, volume sales of the company has increased by 4.5% to 314,053 units while the overall passenger vehicle industry led by Maruti grew 7.67% to 1.91 million units. During the period, Maruti sold 957,603 units, up 15.52% over the same period last year.

Even as the volume growth has been muted over the last couple of years, Srivastava said that the realization per unit of the company in the first three quarters of the current year has increased by 15.3% to Rs 7.5 lakh.

The company will introduce a hatchback (widely expected to be called Santro) in the September quarter of the next fiscal, along with three refreshed versions of its existing models. The company will invest Rs5,000 crore in India by 2021.