Despite a steady decline in the small car segment over the years, Hyundai remains optimistic about its future.
Tarun Garg, the Chief Operating Officer (COO) of Hyundai Motor India, emphasizes that small cars are still crucial for first-time buyers and fleet operators. The growing demand for CNG-powered models is playing a key role in keeping this segment alive.
CNG Variants Are Driving Hyundai’s Small Car Sales
One of the main reasons Hyundai continues to invest in small cars is the rising demand for CNG models. These cars are cost-effective and fuel-efficient, making them attractive for buyers looking for economical options.
The CNG version of the Grand i10 Nios accounts for about 20% of its total sales.
For the Aura, an astonishing 90%+ of its sales come from CNG variants.
Hyundai credits the dual-cylinder technology for this increase in demand, as it offers better space efficiency and convenience.
Tarun Garg highlighted that every year, the industry expects small car sales to stabilize, but the numbers keep dropping.
However, Hyundai sees small cars as essential not only for affordability but also for meeting Corporate Average Fuel Economy (CAFE) norms, which regulate fuel efficiency.
Hyundai’s CNG Models Are Seeing a Steady Rise in Demand
According to Hyundai, the Grand i10 Nios CNG has shown consistent growth in sales. The percentage of CNG variants in Nios sales has increased over the quarters:
Q1 2024: 16%
Q2 2024: 19.5%
Q3 2024: 20.3%
Similarly, the Aura CNG model has witnessed a sharp rise in demand:
Q1 2024: 86.5%
Q2 2024: 89.8%
Q3 2024: 92%
Even the recently launched Exter CNG model is performing well, adding to Hyundai’s confidence in this segment.
The company recorded its highest-ever CNG sales contribution of 13.1% in 2024, proving that more customers are opting for CNG-powered small cars.
Expanding Hyundai’s Reach in Rural Markets
Hyundai is also focusing on increasing its presence in rural areas, where CNG vehicles are becoming more popular.
The company is expanding its dealership network and service centers in smaller towns and villages to cater to this growing demand.
Tarun Garg emphasized that the trend for CNG vehicles is clear – it is only going to increase. More customers are now choosing CNG as a fuel option due to its affordability and widespread availability.
The Shift in Small Car Sales and Consumer Preferences
While Hyundai remains committed to small cars, the overall share of this segment in the company’s sales has declined.
In FY24, small cars made up 22.9% of Hyundai’s total sales.
In the current fiscal year (April–December 2024), this number has dropped to 20.2%.
The primary reason for this shift, according to Garg, is changing consumer expectations. Buyers now prefer vehicles with better features, comfort, and technology, even if it means spending more. Customers are no longer willing to compromise on safety and convenience, which has led to a shift towards SUVs and premium hatchbacks.
CNG Market Growth and Future Prospects
Despite the decline in small car sales, the CNG market is expanding rapidly. Hyundai’s data shows a significant increase in CNG penetration over the past year:
Q1 2024: 13.7%
Q2 2024: 25.3%
Q3 2024: 36.5%
This rapid growth suggests that more manufacturers may start investing in CNG-powered cars, keeping the small car segment alive for years to come.
Overall, Hyundai remains optimistic about the future of small cars, even as overall sales decline. The increasing demand for CNG models is proving to be a major factor in sustaining this segment.
With innovations like dual-cylinder technology and expansion in rural markets, Hyundai believes small cars will continue to play a crucial role in India’s automobile industry. As fuel prices rise and environmental concerns grow, CNG-powered vehicles may become an even bigger part of the country’s automotive future.
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