Garg mentioned that a favorable monsoon season and the government's focus on infrastructure development are expected to boost sales in the rural market.
According to Hyundai Motor India's COO, Tarun Garg, the majority of semiconductor challenges have been successfully resolved, leading to a return to the regular vehicle production schedule. Garg stated, "We have overcome most of the semiconductor issues, and our production is now back to normal. Supplies have significantly improved, enhancing our capacity to meet customer demand."
He also added that stock levels are approaching normalcy as dealers typically maintain a stock level of three to four weeks on average.
The auto industry has been facing production delays due to the semiconductor supply constraint.
Garg mentioned that waiting periods have decreased but vary among different variants, ranging from five to about 10 months. He stated, "Despite our preparations and advanced dispatch of vehicles to dealers, the influence of new bookings has significantly increased the waiting period."
Regarding sales, Garg expressed optimism about the rural market's growth, anticipating a boost in off-take due to a favorable monsoon season and the government's focus on infrastructure development.
Garg highlighted that the monsoon season is expected to boost consumption in rural regions, and the automaker is experiencing strong interest in both SUVs and other car models.
According to Garg, several factors, including improved road infrastructure, higher minimum support prices, and increased data consumption, are contributing to this positive trend.
He mentioned, "In the previous year, we managed to sell over 100,000 vehicles in rural areas. In the current year's first half (H1), we have already sold 53,000 vehicles, which accounts for 53% of last year's rural sales, reflecting an 11% growth over the previous year."
Garg added, "Our penetration rate in rural markets is now a robust 19%, showing a notable increase from around 16-16.5% approximately three to four years ago."
He mentioned that the sales momentum is anticipated to continue during the festive season, particularly driven by the recently launched entry-level SUV, Exter.
"Exter has garnered an excellent response in terms of bookings. As we move forward, we expect it to significantly contribute to the festive season sales, although specific booking figures were not disclosed," he stated.
Furthermore, he noted, "The pent-up demand resulting from the Covid situation has subsided, and we are currently witnessing a robust and immediate demand, which bodes well for the upcoming festive season."
The company aims to increase the proportion of SUVs in its overall sales from the current 53% to around 60%, primarily supported by the sales of Exter.
He stated, "Prior to the introduction of Exter, our market share stood at approximately 18%. We expect this share to increase significantly."
He added, "From January to June, the industry's SUV share in total sales was 46%. During that period, we exceeded this average and achieved over 50%."
Regarding potential obstacles to growth, Garg pointed out high-interest rates and general inflation as significant challenges. He emphasized their impact by saying, "These factors act as dampeners since around 80% of car purchases are financed. Any increase in interest rates has an additional effect on the customers."
Regarding exports, Garg mentioned that the automaker has received a positive response from markets such as Mexico, West Asia, Africa, and Latin America.
"The export demand is showing significant strength. We have upcoming launches of Verna and NIOS in these markets, which adds to our positive outlook," Garg stated.
He also acknowledged, "However, we are mindful of the global challenges and uncertainties."
