Hyundai strengthens India play with dual focus on SUVs and exports

Two new SUVs at the centre of the plan

A significant part of Hyundai’s near-term strategy will revolve around two new SUVs scheduled for launch during the current fiscal.

One of these will be a dedicated electric SUV positioned in the compact SUV segment, while the second will strengthen Hyundai’s presence in the mid-size SUV space. Both categories continue to remain among the highest volume contributors in the Indian passenger vehicle market.

The upcoming EV assumes particular importance for Hyundai as the company looks to improve its position in the electric vehicle segment, where its contribution currently remains below the industry average. Garg acknowledged that while industry EV penetration has moved closer to 5%, the company’s own contribution remains lower.

The new electric SUV is expected to be more localised and positioned for higher volumes. Simultaneously, Hyundai is also trying to improve the performance of the existing vehicles. Garg stated that the latest Venue has been receiving a good response from the market owing to its five-star Bharat NCAP rating. The Exter and Aura have also seen improved traction, particularly in CNG form.

Hyundai noted that CNG penetration increased to 18% during the fourth quarter from 13% a year earlier, while rural penetration also continued to improve steadily.

India’s role In Hyundai’s export strategy expands

Exports are expected to remain a major pillar in Hyundai’s India plans. The company has traditionally remained among India’s largest passenger vehicle exporters, although Garg appears to be positioning India much more effectively in Hyundai Motor’s international production chain.

The new-gen Venue that was launched in September 2025 will now be exported to global markets, making India as the global manufacturing base for the sub-compact SUV. Alongside, the upcoming SUVs are also under consideration for overseas market.

It is interesting that such integration is observed during a period of geopolitical instability experienced by many overseas regions.

Hyundai acknowledged that tensions in West Asia impacted shipments to certain export markets during the fourth quarter. Even so, the company closed FY26 with export growth of over 16%, substantially ahead of its earlier guidance.

With this, Hyundai continues to increase its export diversification by improving its exports to places like Latin America and Mexico. Meanwhile, it continues to diversify its international product range with models such as the Verna and Exter. The company reiterated that despite the challenging geo political senario the overseas markets remains stable.

Domestic push gains scale

On the domestic side, Hyundai believes the market environment has improved gradually over the last few months following GST-related policy changes and improving customer sentiment.

The company reported a stronger recovery in domestic volumes during the second half of FY26, culminating in an 8.5% year-on-year growth during the fourth quarter. April volumes also grew 17%.

The MD and CEO indicated that Hyundai is now seeing growth across multiple segments rather than being dependent solely on SUVs. Models like the Aura and the Grand i10 Nios have had their best ever sales in FY26. This has been led by an improved focus on rural markets.

He said rural contribution has steadily improved over recent quarters, supported by dealer expansion and product interventions. The company has also been implementing programs for improving the performance of dealerships in terms of sales, service, and customer engagement.

Garg explains that Hyundai has kept a rather restrained strategy with respect to discounts, while emphasising brand positioning and product improvements.

Manufacturing expansion becomes a key enabler

Supporting Hyundai’s domestic and export ambitions is an aggressive manufacturing expansion plan.

The Pune factory is set to be a major catalyst of growth in the coming years, with Hyundai planning on raising its total manufacturing capacity in India beyond 1.1 million units by 2030. Moreover, the company has announced another 70,000 units’ capacity expansion for this Pune factory following completion of the second phase of expansion, resulting in a total manufacturing capacity of this facility exceeding 320,000 units in the coming years.

Furthermore, Hyundai has allocated around Rs 7,500 crore worth of capital investment for FY27, which represents one of the largest ever capital expenditures in a single year by Hyundai in recent times.

Garg said nearly half of this investment will be directed towards new products, while a substantial portion will also go towards plant expansion and upgrades at the Chennai facility.

The two upcoming SUVs will be manufactured at Chennai, which Hyundai expects will help improve capacity utilisation levels at the plant following the production shift of the Venue to Pune last year.

For Hyundai the strategy now seems to be built around creating a stronger balance between domestic demand, exports and manufacturing scale, while widening its presence across SUVs, CNG vehicles and electric mobility.