India’s second largest car manufacturer, Hyundai India sales for the month of May 2016 stand at 53,516 units, including exports. This means, as compared to May 2015, sales of Hyundai India has increased by just 1.9%.
The major reason behind slow growth rate is the decline in exports, and the reason behind decline in exports is production constraint.
Hyundai India’s plant in Chennai is the most utilized car manufacturing unit in the country. In order to meet growing demand of buyers in the domestic market, Hyundai has to sacrifice on exports.
Overall production of Hyundai India has been averaging between 50,000 to 55,000 units for some years now. Earlier when the local demand was not as good as today, the company used to used to export a much larger share of cars produced in India as compared to today.
For example, in May 2015, cumulative sales of Hyundai India stood at 52,515 units, for May 2014 stood at 51,718 units and that in May 2013 stood at 56,856 units.
But today, the demand in local market is very high, especially that of Grand i10, Elite i20 and the new Creta, each being winner of Indian car of the Year for 2014, 2015 and 2016 respectively. The company has reduced focus on exports and increased production for domestic market.
For May 2016, domestic sales stood at 41,351 units, which is a growth of 10.41% as against May 2015’s 37,450 units. Exports for May 2016 stood at 11,805 units, as against 15,064 exported in same month last year (declines by 21.64%).