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Hyundai may opt for `Santa Fe' as SUV model

Our Bureau

MUMBAI, July 20

HYUNDAI Motor India Ltd (HMIL), set to do a market study to introduce a sports utility vehicle (SUV), will most likely choose the `Santa Fe' model, currently selling well in the competitive US market.

``We would be looking at the Santa Fe as a possible introduction. Currently with the exception of the Tata Safari, there is no real SUV in the Indian market,'' Mr B.V.R. Subbu, Director (Marketing & Sales), HMIL, has said at a news conference in connecti on with the Mumbai launch of the luxury car, Sonata.

He conceded that the premium SUV market would be small. Besides the Safari, there are also SUV imports, dominated by Mitsubishi's Pajero, plying on Indian roads. At 30 per cent indigenisation, the Santa Fe should cost over Rs 18 lakhs, Mr Subbu said, poi nting out that it would still be cheaper than some of the imported models.

Santa Fe is a top-end SUV from the Hyundai stable. If HMIL decides to enter the SUV segment in India, then it would be in the premium category, Mr Subbu said.

The vehicle should be launched here in about a year and a half. It is possible that in the initial stages the company may opt for CBU imports to seed the market. The emphasis in the long term would, however, be on productionising it -- meaning a process of weld, paint and sell.

``Buyers are very, very discerning. They know exactly what they are looking for,'' he said of the SUV market.

In 2001-2002, HMIL hopes to sell altogether 1,00,000 cars against the 86,000 units its sold in last fiscal. This includes a rise in exports from 5,000 units to 7,000 units. Market share improvement may, however, emerge as the ruling theme, given the fisc al's sluggish economic conditions and poor vehicle sales.

The company has invested roughly Rs 107 crore for a new line to manufacture the Sonata. Mr Subbu said that the investment takes care of other possible car introductions as well, in areas such as paint shop and process de-bottlenecking. `` We should be pr ofitable at about 300 cars per month,'' he said of this specific investment.

``We would be looking at other large cars too,'' Mr Subbu said.

HMIL had targeted sales of 2,000 Sonatas in the first year. The car's local content of 40 per cent would be raised to 60 per cent over the next 18 months, he said. The ex-showroom price here for the car's GLS version is Rs 12,02,271, Gold version Rs 13,2 2,189 and the Gold with option pack Rs 13,42,220.

On the demand for the Sonata -- essentially a D-segment car -- he said, there were an estimated 70,000 C-segment cars (Opel Astra, Mitsubishi Lancer, Honda City etc.), from which at least 20 per cent of the owners would want a better replacement.

While they would be the basic market for the Sonata and its ilk, given the prevailing economic sentiment Mr Subbu said that actual market size might perhaps be half the original dimension.

Exports won't be a viable option for the Sonata, since its production volume was small. ``If you want an international cost structure, at least 1,00,000 units should be made,'' he said. The Santro and the Accent are currently exported, main markets being Algeria, Morocco and Indonesia.

On the other hand, Mr Subbu said, the specifications of the Indian Sonata are superior to that of the same car retailed in the UK.