In the quarter ending December 2024, Hyundai Motor India reported a consolidated net profit of ₹1,161 crore, marking a 19% decrease from the ₹1,425 crore recorded in the same period the previous year. This downturn is primarily due to a 2.4% reduction in total car sales, influenced by both domestic and international market challenges. The company’s revenue from operations stood at ₹16,648 crore, reflecting a 1.3% decline from ₹16,875 crore in the corresponding quarter of the previous fiscal year. This marginal decrease underscores the challenges faced in maintaining sales momentum amidst a competitive automotive landscape.
Domestic Sales Performance
Hyundai’s domestic sales experienced a slight dip, with 146,022 units sold during the quarter, compared to 146,139 units in the same period last year. This 0.1% decline contrasts with the overall 4.5% growth in India’s passenger vehicle market during the same timeframe. The company’s SUV segment, which includes popular models like the Creta and Venue, saw a modest 4% growth, a significant slowdown from the 34.5% growth observed in the previous year.
Export Challenges
On the export front, Hyundai faced notable hurdles. Export volumes decreased by 8%, totaling 40,386 units, down from 43,650 units in the same quarter last year. The decline is largely attributed to geopolitical tensions, particularly the Red Sea crisis, which adversely affected key markets in the Middle East. Additionally, challenges in Latin American markets further compounded the export downturn.
The company’s operating profit margins contracted to 11.3% from 12.9% in the previous year. This reduction is partly due to increased discount offerings aimed at bolstering sales in a competitive market. Despite these challenges, Hyundai reported foreign exchange gains of approximately ₹30 crore, benefiting from the depreciation of the Indian rupee against the US dollar.
Strategic Initiatives and Future Outlook
Looking ahead, Hyundai Motor India is optimistic about revitalizing its performance. The company anticipates low single-digit growth in the upcoming quarter, driven by strategic initiatives and new product launches.
A cornerstone of Hyundai’s future strategy is its commitment to the electric vehicle (EV) segment. The company aims to capture a 20% market share in India’s EV market over the mid-to-long term. Central to this ambition is the upcoming launch of the Creta Electric, slated to play a pivotal role in Hyundai’s EV portfolio. The company is also investing in building a comprehensive EV ecosystem, encompassing localization efforts and the development of charging infrastructure. Beyond electric vehicles, Hyundai is exploring a range of alternative technologies to diversify its offerings. This includes investments in hydrogen fuel cells, hybrid systems, and flex-fuel vehicles. These initiatives align with global trends towards sustainable and environmentally friendly automotive solutions.
Market Expansion and IPO Plans
In response to the challenges in traditional markets, Hyundai is actively expanding into new regions, including Africa and other emerging markets. This expansion strategy aims to mitigate risks associated with geopolitical tensions in existing markets. Furthermore, Hyundai Motor India has received approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO). The company plans to raise $3 billion, valuing itself at approximately $20 billion. This IPO marks the first public offering by a car manufacturer in India in two decades, the last being Maruti Suzuki in 2003.
Despite facing a challenging quarter marked by declines in profit and sales, Hyundai Motor India remains resilient. The company’s proactive approach, encompassing cost optimization, strategic market expansion, and a strong focus on electric and alternative fuel vehicles, positions it well for future growth. As the automotive industry evolves, Hyundai’s commitment to innovation and sustainability will be crucial in navigating the dynamic market landscape.
