After establishing itself as one of the leading players in the Indian passenger vehicle market, Korean chaebol Hyundai could be planning to do something similar in the commercial vehicle market here.
It is learnt from reliable sources that Hyundai has started exploratory activities for an entry into India's commercial vehicle (CV) sector, a market that is listed as top priority among the new regions that the company would like to enter.
The Korean OEM, which has a presence in over 130 commercial vehicle markets across the world, could enter the Indian CV market first with trucks, followed by buses.
The timeline and the route of entry for the Korean CV maker are not clear yet, but the company could be open to both the organic and inorganic entry strategy for India.
Hyundai currently sells around 100,000 commercial vehicles a year. Like other global CV manufacturers, Hyundai is learnt to be betting on India to shore up volumes significantly and build its standing in the global commercial vehicle industry. The Korean OEM’s success in the Indian passenger vehicle industry is expected to assist the CV business, in terms of setting up vendor and dealership networks.
Hyundai started its commercial vehicle business with buses in 1978, and its truck business began in 1984. It has three plants – one each in Korea, Turkey and China. China (the plant was set up in 2014) and India could turbocharge Hyundai commercial vehicles’ growth in the mid- to long term.
CV market seeing an uptick in India
It is to be noted that the commercial vehicle market, which is cyclical in nature, is witnessing an upturn in India. Between April-October 2016, sales of medium and heavy trucks grew by 15 percent to 22,749 units; sales of buses rose 33 percent to 3,185 units.
For FY2015-16, M&HCV (trucks) sales grew 32 percent 258,488 units while bus sales numbers were up 19 percent to 43,885 units.
Tata Motors and Ashok Leyland have, for long, been the main players in the M&HCV market. At present, Tata Motors has 55 percent market share in the M&HCV truck segment while Ashok Leyland has a 30.6 percent share. In the bus segment, Ashok Leyland has 44.63 percent market share while Tata Motors has 34 percent market share.