Comparison of Hyundai Motors vs. Maruti and Tata Motors: Detailed Insight

Hyundai Motor India Ltd, the Indian subsidiary of the South Korean automaker Hyundai, has submitted preliminary documents to the Securities and Exchange Board of India (SEBI) to initiate an initial public offering (IPO). If successful, this Hyundai IPO will be the largest in India’s history, surpassing the significant Rs 21,000 crore share sale by LIC. Hyundai Motors, a significant player in this market, continues to demonstrate strong hold in the 4-wheeler market. This comprehensive analysis delves into Hyundai’s market positioning, comparing it with other key players, and examines broader industry trends and factors influencing the sector.

Hyundai Motors’ Performance

In May 2024, Hyundai Motors sold 49,151 units, marking a marginal 1% year-on-year (YoY) growth from 48,601 units in May 2023. However, month-on-month (MoM) sales saw a 2% decline from 50,201 units sold in April 2024. Despite the slight MoM dip, Hyundai’s consistent performance reflects its strong market presence and effective product strategy. Key models such as the Venue, Aura, Exter, Alcazar, and Kona continue to bolster its sales, contributing to a stable market share of around 15%.

Comparing Market Leaders

• Maruti Suzuki: Maruti Suzuki, the market leader, sold 174,551 units in May 2024, experiencing a 1.98% YoY decline from 178,083 units in May 2023. However, MoM sales increased by 3.84% from 168,089 units in April 2024. Despite a market share decline from 51.2% in fiscal 2019 to 42.9% in fiscal 2024, Maruti has regained some ground with successful launches like the Grand Vitara and continued popularity of models like the Ertiga and Brezza.
• Tata Motors: Tata Motors registered total sales of 76,766 units in May 2024, a 2.39% YoY increase from 74,973 units in May 2023. MoM sales saw a slight decline of 0.97% from 77,521 units in April 2024. Tata’s market share has risen from around 7% in fiscal 2019 to 11.3% in fiscal 2024, driven by strong demand for its SUV models Nexon and Punch.

Factors Influencing Growth

• Positive Sentiments: Positive rural demand, expected good monsoon, and improved finance availability have kept market activities buoyant. Good movement in market loads, cement, iron ore, and coal sectors also contributed positively, despite supply constraints and a lack of OEM marketing activities.
• Challenges: Extreme heat and election-related uncertainties significantly impacted footfall, with showrooms seeing an 18% drop in walk-ins. Market liquidity issues and high inventory levels strained dealership profitability. Forecasted above-normal rains could further impact sales and walk-ins.

Company-wise Sales Analysis

Source- company websites and data from internet

Market Share

The passenger vehicle industry has experienced notable shifts in market share dynamics. Maruti Suzuki’s market share declined from 51.2% in fiscal 2019 to 42.9% in fiscal 2024, though recent successful launches have helped regain some ground. Hyundai has maintained a stable market share of around 15%, driven by popular models. Tata Motors has increased its market share from 7% in fiscal 2019 to 11.3% in fiscal 2024, with SUVs like Nexon and Punch contributing significantly.

Other notable players include Mahindra & Mahindra at 11.2%, Kia Motors India at 6.0%, and Toyota Kirloskar Motor at 5.9%. Honda Cars India holds a market share of 2.1%, while SkodaAuto India, MG Motor India, Renault India, Volkswagen India, and Nissan Motor India each maintain smaller shares ranging from 0.4% to 1.1%.

Segment-wise Market Share

• Compact Hatchback: Dominated by Maruti Suzuki with 79.7%, followed by Hyundai and Tata at 9.4% and 9.3%, respectively.
• Premium Hatchbacks: Led by Maruti Suzuki at 51.8%, with Hyundai at 18.7% and Tata at 15.7%.
• Compact Sedans: Maruti Suzuki commands 58.5%, Hyundai holds 19.8%, and Honda 13.1%.
• Premium Sedans: Hyundai leads with 31.2%, followed by Volkswagen at 21.2% and Skoda at 19.5%.
• Compact SUVs: Maruti Suzuki holds 27.5%, Tata at 22.7%, Mahindra at 19.9%, and Hyundai at 17.0%.
• Mid-size SUVs: Hyundai leads with 30.3%, followed by Maruti Suzuki at 22.8%.
• Large SUVs: Mahindra dominates with 69.3%.
• Extra-large SUVs: Toyota leads with 84.2%.
• MPVs and Vans: Maruti Suzuki commands 54.1% and 100% market shares, respectively.

Source – Hyundai company website

Touchpoints and Service Network

According to Crisil report, as of fiscal 2023, there were over 9,200 sales touchpoints across India catering to the overall demand for passenger vehicles. Maruti Suzuki, Tata Motors, and Hyundai Motor India are the top OEMs with the highest number of sales touchpoints. Maruti Suzuki operates over 3,250 sales touchpoints, including Arena and Nexa showrooms. Tata Motors has more than 1,400 sales touchpoints, making it the second-largest sales network in India. Hyundai Motor India has over 1,350 sales touchpoints.

Maruti Suzuki also operates more than 4,560 service touchpoints, 1.4 times the number of its sales touchpoints. Hyundai Motor India has the second-largest number of service touchpoints with over 1,500, 1.1 times the number of their sales touchpoints. Tata Motors has 855 service touchpoints, a lower ratio compared to the major OEMs.

Conclusion

The Indian auto retail sector continues to demonstrate resilience and growth amidst various challenges. Hyundai Motor India maintains a steady presence in the Indian passenger vehicle market. The robust performance of the auto industry as a whole indicates a positive economic outlook, which could translate into increased defense spending in the upcoming July 2024 budget. However, the government will need to carefully navigate its spending priorities to ensure a balance between national security and social welfare programs.

As the industry looks forward to FY 2025 with cautious optimism, factors like post-election stability, good monsoon forecasts, and new product launches, particularly in the EV segment, are expected to drive demand. However, addressing challenges like extreme weather, intense competition, and liquidity issues will be crucial for sustained market improvement. The upcoming budget in July 2024 will play a pivotal role in shaping the future trajectory of the auto sector, with potential implications for infrastructure projects, economic activities, and overall market dynamics.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.