Hyundai Motor India Ltd. (HMIL) began exporting in 1999, when it shipped a batch of 20 cars to Nepal. Come today and the company is exporting over two million cars every year. In an exclusive interaction with The Dollar Business, Rakesh Srivastava, Sr. Vice President and Division Head (Sales & Marketing), HMIL, talks about the importance of the Indian automobile market in the global scheme of things.

Proyashi Barua | November 2016 Issue | The Dollar Business

TDB: After you took charge as the Senior Vice President in 2012, what have been some of the major changes in Hyundai’s export and marketing strategies? What is your vision for exports by the company?

Rakesh Srivastava (RS): I think the biggest change has been in terms of sharpening our focus on select export destinations. We geared our manufacturing units to serve the markets in Middle East, Africa, Latin America and Asia. The compact range of sedans and SUVs were the main offerings and we pioneered a range of sophistications from the engineering and design perspective. Europe and the rest of the Americas were no longer priority export regions for Hyundai India.

The second change was that we also strengthened our domestic product portfolio. There was a pronounced emphasis on premium designs and features to enhance the aspirational quotient of our products in India. Although we are India’s biggest exporter of passenger cars, we place a bigger importance on the domestic market. It is the domestic market that generates volumes and gives us economies of scale. The export vision is fairly simple – we want to gain a global edge through our exports.

TDB: You had an impressive sales growth of 15.1% y-o-y in FY2016. How has your sales been so far this year?

RS: Our total sales for passenger cars this year has been 4,24,214 units, out of which 3,27,843 units have been sold in the domestic market that comprises 19.1% of the domestic passenger car market share – a precise 96,371 units have been exported. Now this is a very heartening figure in light of the fact that the current financial year has not ended. In the last financial year, the total sales was 6,43,269 units and units sold in the domestic market were 4,76,001. We also exported 167,268 cars. We are expecting to experience a benchmark growth in terms of sales during the festive season. The evenly spread monsoons along with the implementation of the 7th Pay Commission is building positive market sentiments across product categories and is generating buoyancy in the passenger car segment.

TDB: Do you have any new launches in the pipeline?

RS: As you know, we have just launched the 6th generation Elantra. It has already received 11,000 bookings and 18,000 enquiries. So, for the ongoing festive season, we want to consolidate our sales basis the products that have already been launched. In other words, our marketing efforts are geared to strengthening sales in all our 10 car models across segments – Eon, i10, Grand i10, Elite i20, Active i20, Xcent, Verna, Creta, Elantra and Santa Fe.

However, next month, we plan to launch the premium SUV Tucson. This will be positioned somewhere between Creta and Santa Fe. Tucson is modelled on our revolutionary ‘Fluidic Sculpture’ design philosophy and has stylish features like an imposing hexagonal grille with chrome slats, stylish sweptback headlamps, sloping roofline, a sporty bumper, and wrap-around LED taillights to complement its rugged profile.

TDB: Hyundai Motor India Ltd. has been consistently India’s No.1 exporter of passenger cars over the last decade. Has this milestone changed the way in which the global automobile fraternity looks at India’s prowess in terms of automobile manufacturing?

RS: Most certainly yes! One must understand that in the pre-globalisation days, India was an importer of cars. However, in the last two and half decades a lot has changed. The average car buyer has become more discerning and purchasing power has quadrupled. This has encouraged automobile manufactures to experiment with high-end technologies and pioneer state-of-the-art designs. Consequently, cars manufactured in India (both by home-grown companies and companies with international collaborations) started making inroads to several export destinations.

This has also strengthened the confidence of the foreign collaborators. For instance, the developments and sophistications at Hyundai Motor India Limited have strengthened the confidence of our parent company. In a nutshell, I would like to say that today India is a crucial and strategic launchpad for all multinational car companies.

TDB: As the leading car exporter, what will you say has been your greatest contribution to 'Make in India'? Any plans to consolidate on this in coming times?

RS: Earning foreign exchange has been the most obvious benefit – but that isn’t the only benefit. Much before the ‘Make in India’ policy was introduced, we had a defined objective of manufacturing cars for all our export destinations in India. For us, it has always been largely a make and export strategy. While we do incorporate features suited to specific needs of our global markets, we believe that it can all be manufactured in our domestic plants. It becomes easier to monitor quality when the full body product is manufactured here.

In the process, we have created a large manufacturing ecosystem comprising small and medium enterprises. There are about 8,000 components in a car and the supply comes from pre-defined and qualified vendors. Also we have generated employment opportunities for engineers, research and development specialists, and technicians.

As we embark on the next phase of manufacturing sophistication, we will have an unprecedented demand for skilled manpower in various new fields like mechatronics, etc.

TDB: Innovation has been the pronounced success mantra for Hyundai. Can you cite some specific innovations that have helped you tide over your closest competitors, both in key export destinations and domestic market?

RS: All innovation encompasses the objective of customer convenience. Our research and development facility at Hyderabad is constantly striving to pioneer the latest technologies that will change the way in which people think about automobiles across the world. We don’t want our cars to be just modes of transportation. We want them to aid modern lifestyles and aspirations.

Some of our breakthrough innovations have been the introduction of rear air conditioners in Grand i10 and multi-point fuel injection systems in Santro. These features may have been replicated by other car manufacturers, but we were the pioneers.

We also introduced the concept of side and curtain airbags in the top-end variant of Creta. We realise that head-on or side collisions are not the only causes of road accidents. The car can be hit from the top or any other point. These side and curtain airbags provide insulation in such situations. It will not be an exaggeration to say that sales for Creta in both the domestic and overseas market have spiked because of this safety feature. Customer research has shown that innovation has been the key factor that has spiralled the demand for our latest offering, the 6th generation Elantra. The smart and automatic trunk that facilitates hassle free loading and unloading coupled with the front seat air-condition ducts have been huge hits in both domestic and overseas market.

TDB: You just announced your next generation connected car strategy. Could you please elaborate?

RS: An automobile is not just a means of transport or a product of engineering. Therefore, we are pioneering the development of technologies to utilise automobiles as IT machines, which can effortlessly access information on the Internet and communicate vehicular information whenever necessary. The connected car, currently under development by Hyundai Motor, will enable new features like remote diagnostics and autonomous driving. Through full integration of latest IT Technologies, automobiles can function like high-performance computers on wheels.

Our vision of ‘Hyper Connected Intelligent Cars’ is to link cars not just with the homes and offices of drivers, but with the network of cities and regions they are located in. In this regard, we plan to introduce four main functions – Smart Remote Maintenance Service, Autonomous Driving, Smart Traffic and Mobility Hub.

In addition to continuous R&D and recruitment of top talent, we are actively pursuing open innovations through collaborations with our global partners. In other words, we plan to embark on a new era of connecting the car to life with automobiles becoming the hub of infinite transformation.

TDB: Hyundai Motor is internationally acknowledged for its customer oriented smart services. Would you share something in this respect?

RS: We have developed a new customer service system, based on advanced IT technologies, which makes more services available in real time. For example, we have launched Hyundai Virtual Guide, the first user manual created on a virtual reality platform, providing a new level of convenience and user experience.

In 2014, we had released a new mobile platform based diagnostics system, which allows a comprehensive assessment of a vehicle’s condition in much less time than ever before. Because the new system is PC based, diagnostics can also take place away from service stations. We started to automate our service centres across the world in 2014 to increase the credibility and efficiency of our customer services. From the time of arrival to the time of departure, every procedure is managed electronically to provide a customer-oriented service.

TDB: Can you tell us something about your proactive quality management strategy? What is it all about?

RS: We are well aware of the fact that the customer today is extremely quality conscious. And hence when it comes to quality management, our goal is to produce vehicles with zero defects. In order to realise this ambitious goal, we implemented something called a ‘Proactive & Creative Global Safety Quality Management’ structure.

It is essentially a unique strategy which promotes quality management as the top priority within the company and strengthens internal capacity in all areas including development as well as production and support, with the single motive of strengthening our brand commitment.

We have also created a customer oriented quality management platform and process – 'Q cluster', which identifies and addresses potential quality issues associated with vehicle safety at the development stage. In terms of after sales service, Hyundai Motor is increasing its capacity to detect and address the minutest possible problems in the shortest possible time.

TDB: We understand that Hyundai has created a roadmap to improve fuel efficiency significantly by 2020. What are some of the initiatives that are being taken to achieve this goal?

RS: We are continuing to develop advanced new technologies to gain global competitiveness in fuel efficiency. The goal of the roadmap is to achieve a 25% improvement in fuel efficiency above the baseline by 2020. This requires the incorporation of next generation powertrains in up to 70% of our vehicles sold.

Vehicle weight reduction efforts are on in full force with the goal of an average 5% reduction. Part of this reduction will be achieved by using high strength steel plates as well as by incorporating a high proportion of parts made with advanced materials like aluminium, engineering plastics and carbon fibre.

TDB: What about reducing greenhouse emissions at manufacturing plants?

RS: We are striving to reduce greenhouse gas emissions at all stages of our operations, including purchasing, logistics, production, and sales and service. Since 85% of our emissions are from production plants, we are introducing several measures at our plants, including the installation of high-efficiency facilities, waste heat recovery and energy conservation. We are also working towards transitioning to renewable energy. All these efforts will help us effectively respond to the ever strengthening emissions reduction policy across the globe.

TDB: In the automobile sector, Hyundai has been on the forefront of CSR initiatives. Can you tell us something about your CSR activities?

RS: Promoting traffic safety, generating mobility for all, environment safeguard, tackling climate change, nurturing social innovators and creating a better future with services and technologies are part of our initiatives. We have introduced the children safety quiz and children safety fairs. We have championed mobility improvement for people with disabilities for a long time, in ways such as development of special ‘easy move’ vehicles for people with disabilities, construction of special playgrounds for disabled children, etc. We also established a social enterprise Easy Move Inc., which manufactures and support various products for the physically challenged. Also in 2015, we opened the ‘Chakka Chakka Playground’, which was especially designed for children who have impaired vision to enable them to experience the joy of driving using autonomous vehicles.

TDB: Are you happy with the current taxation regime in the Indian automobile sector? What more can the government do to boost exports?

RS: I think the volume of taxes are justified. The problem is with the process because of its many layers. Also, the structure is not well defined and lacks ownership. Quality inspections and speedier reimbursements are the need of the hour. However, hope has now arrived – Goods and Services Tax (GST), through a single-window system, will make things more transparent.

I would like to say that while awards and accolades which have been instituted to acknowledge our milestones are much appreciated, the government should also introduce some more incentives for exporters. This would give exports from this segment, as well as country, a great boost. This segment has the potential to perform wonders.