Hyundai Motor India is preparing for its next phase of growth with Tarun Garg, Chief Operating Officer, coining the phrase “double-engine growth.” The idea is simple but powerful, Hyundai expects both exports and domestic sales to accelerate together, creating a rare alignment in its India journey.
“This is the first time in many months that both domestic and export markets are poised to grow simultaneously. For us, it is a true double engine,” Garg said during a recent media roundtable.
The remark captures a larger truth about the company’s India strategy. For years, Hyundai has relied on exports to cushion weak demand at home. Now, with policy changes such as the new GST slabs lifting sentiment in the domestic market, the company is betting on both legs moving in unison.
Exports: A stronger second leg
Exports have quietly been Hyundai’s buffer during uncertain cycles in India. In the first five months of this fiscal, when domestic numbers were under pressure, overseas shipments grew by 12.5 per cent. The growth was not accidental. Hyundai has deliberately pushed exports into markets where demand resilience is higher, such as the Middle East, Latin America and South Africa.
( Hyundai banks on India to achieve its global target of selling 2 million EVs by 2030)
Exports today account for about a fifth of Hyundai’s overall volumes, with revenue share ranging between 21 and 27 per cent. Garg’s ambition is to lift that contribution to 30 per cent by 2030. This is not an impossible target given that Hyundai’s new Pune facility will add 170,000 units to its production base, taking total capacity close to one million units by end-2025 and further to 1.07 million units by 2028. The company has already proven its ability to “debottleneck” capacity in Chennai over the years, and the new investments will give it enough headroom to balance exports with local demand.
For Hyundai, exports are not just about filling gaps in production. They are a showcase of India’s role as a strategic manufacturing hub within the global Hyundai Motor Group. The brand’s success overseas-built on competitive localisation, scale, and a line-up that resonates with emerging markets, reinforces India’s position as one of its most critical bases outside Korea.
Domestic market: Riding on aspiration
The domestic market, however, remains the ultimate prize. Here too, Hyundai sees momentum returning. The catalyst is the government’s GST 2.0 reform, which has slashed rates by 11-13 per cent on small cars and compact SUVs. The timing could not have been better, coming just as the industry was showing fatigue.
Interestingly, while industry chatter has focused on how entry-level hatchbacks will be the biggest beneficiaries, Hyundai has a contrarian view. Garg believes the real action will be in the sub-four metre SUV space, home to the Venue and Exter. “These models combine affordability and aspiration. Customers in this space want ground clearance, features and design, not just a low sticker price,” he argued.
Tarun Garg, COO, Hyundai Motor India, is of the believe that with GST cuts feeding directly into lower sticker prices and reduced on-road costs, Hyundai expects sentiment to lift across both rural and urban markets. (Mohd Nasir for HT Auto)There is merit in his point. The ₹6-10 lakh band remains the largest by volume in India, and in recent years SUVs have steadily displaced hatchbacks in this price bracket. Customers who once drove away in a Santro or i10 are now looking at an Exter or Punch. The price segment hasn’t changed, only the body style has.
Beyond the numbers, the mood is also shifting. Rural demand has been buoyed by good monsoons, higher minimum support prices and better road infrastructure. Urban centres, which were hit by economic uncertainty, are now showing signs of optimism. With GST cuts feeding directly into lower sticker prices and reduced on-road costs, Hyundai expects sentiment to lift across both rural and urban markets.
GST impact: More than just small cars
The new GST slabs have been the talking point of the season, and Hyundai’s reading is layered. On the face of it, the biggest cut, 11 to 13 per cent, has come in the sub-four metre category. But the true impact lies in how this changes customer behaviour across segments.
Garg pointed out that the reform effectively brings more of its higher-volume models into a friendlier tax regime. More importantly, it enables customers to stretch their budgets within the same EMI envelope. Someone who could earlier afford a mid-variant of the Venue may now opt for the top trim, loaded with features, he explained. In Hyundai’s view, this is where the benefit will be most visible, not in reviving bare-bones variants, but in allowing customers to trade up.
This insight runs counter to the traditional industry narrative that lower entry prices will bring back the hatchback boom. As Garg put it, “Customers who once bought hatches in the six-to-ten lakh band now want SUVs with more features. That aspiration is not going away. The GST cuts will only accelerate that shift.”
For Hyundai, this is good news. Its portfolio is already heavily tilted towards SUVs and compact sedans, with five models besides the Creta ranking among the top 30 nameplates in India. The company believes the reform will further consolidate its position in the very segments where its strengths lie.
Portfolio performance: Beyond Creta
The Creta continues to be Hyundai’s most important model, dominating the midsize SUV market for nearly a decade. Yet, Tarun Garg insists the brand’s success is not a one-trick story. Other models, the i10 Nios, Aura, i20, Venue, Exter, Verna, Alcazar and Ioniq 5, together make up around 60 per cent of Hyundai’s volumes.
The i10 Nios and Aura are solid performers in the entry segment, where Hyundai’s clever dual-cylinder CNG variants have pushed penetration to record levels. The i20 still finds buyers among young urban customers who want a premium hatchback with features and design flair.
Garg believes that the Venue has settled into its role as a steady workhorse in the compact SUV space, quietly holding its ground month after month. The Exter, on the other hand, is the new kid on the block that has hit the sweet spot straight away, offering SUV looks at a price point that doesn’t scare off first-time buyers.
( Hyundai witnessed strong rural SUV demand, matching urban region: Tarun Garg)
And then there’s Hyundai’s push into electrification, where the company is clearly playing a two-front game, building scale with the Creta Electric while keeping the Ioniq 5 as its tech and design showpiece. The Creta Electric, launched earlier this year, takes Hyundai’s most successful SUV into the EV era, ensuring that scale and familiarity support adoption.
At the other end, the Ioniq 5 acts as a halo product, showcasing design and technology for early adopters. Garg pointed out that EV penetration in India is no longer stuck at token levels.
From around 2 per cent in 2023, it has already touched 6 per cent in August 2024, proving that momentum is building. “Every segment will see growth,” he said, emphasising that EV demand is expanding both at the aspirational premium end and in the mainstream where models like the Creta Electric play.
Fleet revival adds another lever
Another subplot in Hyundai’s growth story is the fleet market. Once a sizable channel, it lost momentum during the pandemic as personal mobility became the priority. Financing constraints also slowed the segment. But in the last six to eight months, signs of revival have been unmistakable. Ride-hailing operators are once again expanding their fleets, while corporate buyers are regaining appetite.
Hyundai, with models like the Aura and Nios that straddle affordability and efficiency, is well-positioned to capture this demand. Garg recalled that pre-COVID, fleet sales were a healthy contributor, and sees no reason why they will not return to that level now. For Hyundai, this provides an incremental lever alongside retail demand.
Industry outlook: Back to the growth path
The broader Indian auto industry has been through a patchy period. Between April and August, passenger vehicle sales were down by nearly 2 per cent, raising fears of a prolonged slowdown. But Garg believes GST 2.0 has flipped the script. He forecasts industry growth of about 5 per cent between September and March, effectively a seven percentage point swing from the earlier negative trend.
In the longer term, Hyundai’s leadership remains pragmatic. Growth in India has historically averaged between 5 to 7 per cent CAGR, punctuated by cycles of boom and correction. Garg pointed out that while GST provides a strong near-term push, global uncertainties, from geopolitics to commodity prices, remain a risk. “History tells us growth usually averages 5 to 7 per cent. With this reform, and if geopolitical pressures ease, we can sustain that trajectory,” he said.
For Hyundai, this means planning not just for the next festive season, but for the next decade. Capacity expansion, product diversification and technology access from its parent give it confidence to hold its ground through these cycles.
A broader playbook: Listening to the customer
Underpinning all of Hyundai’s moves is a fuel-agnostic philosophy. Instead of betting on one technology, the company is making sure it can offer customers what they want, when they want it. In entry-level cars, that means CNG, which now contributes a record share. In midsize SUVs, diesel still has a strong following, and Hyundai continues to serve it. For the future, hybrids and EVs will enter the mix, with six EVs already planned by FY30.
This flexibility is more than just hedging bets. It is Hyundai’s way of saying it will not impose a choice on Indian consumers. “Our philosophy is simple: listen to what the customer wants, and deliver it. Whether it is CNG in the Aura, diesel in the Creta, or an EV for the urban buyer, we will be there,” Garg summed up.