New Delhi: Hyundai Motors has decided to fire a larger volley of smaller cars into the Indian market, in a bid to wrestle its way into the top slot.

Being the latest entrant in the low-cost mini-car segment, the Korean motor company has announced plans to develop its low-cost car in India, with the all-critical design and technical support from its research facility in Hyderabad.

As part of its expansion plans and to compete with Maruti Suzuki in the small car segment, Hyundai Motor India Limited (HMIL) plans to launch a new 800cc car in the domestic market. According to Hyundai, research and development (R&D) the new car is under joint development at R&D centres in Hyderabad and Namyam (Korea). The company plans to roll out the car within the next three to four years. (See: Hyundia's new 800cc cars to roll out in India in three to four years)

Defending the bottom of the pyramid
Market sources say the new small car will help Hyundai defend the lower end of its market. The entry level of the car market has been redefined by the much awaited Tata Nano, which sent shockwaves through the global automotive world with its Rs1 lakh ($2,500) price. Driven by the fact that the Tata's could do it, a number of global companies such as GM, Toyota, Renault-Bajaj, Fiat and Volkswagen are embarking on their micro-car programmes, and one with a prototype already out is two wheeler company Bajaj.

Hyundai Motor India has reportedly undertaken a mammoth feasibility exercise to delve into the mind of the Indian consumer, trying to come up with a better mapping of driving conditions, styling cues and technical specs for the proposed small car.

Given its experience in the Indian market, and all the insight generated thus far from its research, Hyundai is planning to come out with a petrol car, just a notch above Tata's Nano.

Knowing Hyundai Motors in India, the car is bound to be price-competitive, and probably meant exclusively for the Indian market. The company estimates a potential annual demand for around two million units of this car by the time the product actually rolls of the assembly line and makes it to the market. That will also give Hyundai time to observe Tata's Nano, and how the Indian public reacts to cars in the micro segment, allowing the company to tweak its product into a superior offering.

Hyundai's made-in-India small cars
Hyundai has already announced its commitment to make India its sole small car manufacturing hub, and has even relocated its small car research and development (R&D) to its Hyderabad facility. It commissioned its second plant in February 2008, beefing up its operations. (See: Hyundai Motor India commissions its second Indian plant)

Work on the small car project has kicked off, with the initial computer-aided designing and technical analysis in progress. The car is expected in around three years time, having been jointly researched and developed by the Hyderabad facility as well as Hyundai's global R&D headquarters at Ulsan, Korea. Leveraging technology, the Hyderabad R&D centre is hooked up to Hyundai's supercomputers at Ulsan, making it more of a real-time collaboration and mentoring programme rather than a co-working relationship.

Serving the segment below the Hyundai Santro
Hyundai's micro car is expected to be priced well below its Indian success story, the Santro, which retails in Delhi for Rs2.65 lakh (ex-showroom). Company sources say that the project is targeting the segment above the Nano (Rs 1 lakh or $2,500), and the consequent price point would range around $4,000 to $5,000, or between Rs1.8 lakh and Rs2.25 lakh.

Hyundai is reported to be quadrupling its research and development people count for the small car project by growing the team to 800 engineers from the present 200. Its research facility is expected to yield results in new technologies vis-à-vis the powertrain (which includes includes the engine, transmission, driveshafts, differentials), and in alternative fuels.

Hyundai will also commence exports of engines sometime next year to its Korean partner Kia Motors, which has a huge sales network in the US as well. Amongst other importers of Hyundai's engines would be other Asian markets, including Malaysia.

According to Hyundai Motor India's managing director, H S Lheem, the company is already manufacturing the i10, Santro and Getz at the Chennai plant, with the new model i20 scheduled for production there by the end of the year.

Recently, Lheem commended the company on a ''highly successful 10 years'' of operations in India, flagging off the Delhi to Paris transcontinental commemorative drive of the i10 Kappa across 10 countries. The event is co-sponsored by Hyundai's partners Mobis, Shell, Bridgestone, Mando and HSBC, all of whom Lheem said played a significant part in Hyundai's success in the past decade.

According to Lheem, Hyundai make up 67 per cent of car exports from India. All together, Hyundai seems to be definitely on track to shake up the status quo in the car manufacturer rankings.

As Lheem puts it succinctly, "We hope to become the no 1 car major. While our current market share in the domestic market stands at 22 per cent, we hope to become the largest car manufacturer in the time to come."

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