Hyundai would rather use the freed-up production capacity to cater to ever raising demand for SUVs and compact crossovers
Hyundai Motor India is set to retire the iconic Santro nameplate for the second time owing to slowing demands and a shift in focus towards crossovers. The last unit of the new Santro is said to have rolled out of the Korean automaker’s Chennai facility sometime last week. Dealers have been notified to stop taking bookings if they do not have stock. Last few units available at select dealers, till stocks last.
Hyundai Santro at a glance
Hyundai entered the Indian market several years ago, in 1998. Promoted by Shah Rukh Khan, the first generation Santro quickly established itself as one of the top selling cars in the country. It had the right ingredients to please the unforgiving Indian customers, sealing itself a firm position towards the top of the sales charts. It was discontinued in 2014 due to low demand.
After two generations and a few facelifts later, the Hyundai Santro hung up its boots, making way for the i10 which went on to become yet another huge success story in the Indian hatchback segment. As Hyundai moved the i10 significantly up the market in the subsequent generations, there was once again a Santro-sized hole in the brand’s portfolio. The Eon was a flop to say the least. So, the Santro nameplate was brought back from the sabbatical in 2018 with the hope that it will recreate the original model’s magic.
Initial months saw decent sales of over 5k per month. But as the months passed and competition increased, sales started to decline. In the last few months, sales of Santro have averaged in the region of 2,000 to 2,500 units per month. Less than 4 years after its launch, Hyundai has decided to discontinue the new gen Santro from India. Last unit has rolled off the production line.
Making space for more profitable models
Though the new Santro emerged as a well rounded product, the small car segment started to gradually lose its shine as SUVs started to take over. In its journey since launch in Oct 2018 till May 2022, the new Santro has clocked cumulative sales of 1.46 lakh units which in itself is not bad, but for a low-margin product, it isn’t anything to write home about either.
Moreover, the model’s viability is seriously threatened by the government’s proposal to make 6 airbags mandatory in all passenger cars. While this move would go a long way in making vehicles safer, it would also drive up the cost of small cars to an unsustainable level. As it is, the rising input costs are already impacting the demand for the once very popular budget cars.
Hyundai Santro Replacement – Punch Rival?
Hyundai India is reportedly getting ready to launch a Tata Punch rivalling small SUV sometime next year. Ahead of that, it is imperative for the company to easy up some crucial production capacity to cater to a strong demand. Withdrawing a low-volume, low-margin product is one of the easier ways to do so. Punch has become one of the best-selling small SUVish hatchback in a short span of time. It is generating sales of over 10k units per month. Apart from Hyundai, Maruti and Mahindra are also working on launching similar segment cars.
The production halt of Santro comes just a few days after Hyundai pulled the plug on other low-volume models like Xcent Prime, Aura and i10 Nios diesel. As periodic price raises become inevitable more and more small cars from various OEMs are expected to meet a similar fate. Unfortunately, such a scenario would mean, most cars which manage to survive will be out of reach for the average lower middle-class audience and that will be a shame!
