Hyundai Motor India’s Market Share Slide Rings Alarm at South Korean HQ

Hyundai Motor India Ltd (HMIL) has been facing a continuous decline in market share, earnings, and stock prices since its public listing in India last October. Reports indicate that its South Korean parent company, Hyundai Motor Co (HMC), is now concerned.

According to a report by The Economic Times (ET), Hyundai Motor recently dispatched a high-level fact-finding team of six members from sales, marketing, finance, and product development.

The team spent a week in India meeting key stakeholders, including dealers, customers, suppliers, analysts, and financiers, the report said.

While HMC executives often visit the Indian subsidiary, this is the first time a cross-functional team has been sent specifically to assess market realities and competitive challenges.

ET cited a source saying, “They (Hyundai HQ) are closely monitoring the growing preference for homegrown brands, especially Mahindra.”

Hyundai’s Shrinking Market Share

Hyundai Motor India Ltd (HMIL) closed FY25 with a 14% market share—its lowest since FY13. The company’s long-held position as the country’s second-largest passenger vehicle maker, behind Maruti Suzuki, is now under threat, according to the report.

Although the Creta SUV remains competitive, Hyundai slipped to third place in February before briefly reclaiming second in March.

In April, HMIL dropped further to fourth place in wholesale shipments, overtaken by domestic rivals Mahindra & Mahindra and Tata Motors. While Hyundai held the second spot for the fiscal year, its position is increasingly vulnerable this year.

April sales figures underscore this trend, with volumes falling 4.6% year-on-year to 60,774 units, mainly due to a slowdown in domestic demand. Domestic sales declined 11.6% to 44,374 units, while exports grew 21.5% to 16,400 units—the highest export volume in 19 months. In comparison, Mahindra sold 52,330 units and Tata Motors moved 45,199 units in the same month. Retail sales followed a similar pattern, with Hyundai selling 45,350 vehicles, behind Tata’s 46,000 and Mahindra’s 47,800.

For FY25, Maruti Suzuki led the market with a 40% share, followed by Hyundai in second and Mahindra in third with 13%.

Confidence in Expansion

Internal concerns about the market share decline surfaced publicly during Hyundai Motor Company (HMC) President and CEO Jose Munoz’s first visit to India. At a town hall with employees, Munoz emphasized the strategic importance of the Indian market and urged faster growth.

HMIL’s Chief Operating Officer, Tarun Garg, told the publication that the dip in market share was due to several factors, including a high base effect, product lifecycle stages, and increased competition from new entrants.

Garg also highlighted that Hyundai’s upcoming plant in Talegaon, Maharashtra—set to open in the second half of this fiscal year—will add capacity for both domestic sales and exports. The existing plant in Sriperumbudur, Tamil Nadu, is already operating above 90% capacity.

Since its public listing on October 22, 2024, at Rs 1,820.40 per share (below the IPO price of Rs 1,960), Hyundai’s shares have remained largely flat. Ahead of its fourth-quarter earnings on May 16, shares declined about 1% to Rs 1,819.45 on the BSE.

Q4 Preview

Hyundai Motor India Ltd is expected to report a year-on-year decline in both revenue and profit for the March quarter, primarily due to subdued wholesale dispatches and higher discounting, analysts say.

Revenue is forecast to fall 1.8% year-on-year to Rs 17,349 crore, while earnings before interest, taxes, depreciation, and amortization (EBITDA) is expected to decline 190 basis points to 12.1%, reported Mint.

Net profit is estimated to fall 21% year-on-year to Rs 1,332 crore for the January to March period, according to Bloomberg estimates.