Analyst Concall
Hyundai Motor says "worst is behind" on India auto demand
This story was originally published at 19:42 IST on 30 July 2025
Register to read our real-time news.Informist, Wednesday, Jul. 30, 2025
Please click here to read all liners published on this story
--Hyundai Motor: Prolonged soft demand for cars weighed on sentiments in Q1
--CONTEXT:Comments by Hyundai Motor India mgmt in post-earnings analyst call
--Hyundai Motor: Co's rural penetration crossed a record-high 23% in Q1
--Hyundai Motor: Apr-Jun margin fell on year due to higher discounts
--Hyundai Motor: Better model mix in India boosted co's Apr-Jun gross margin
--Hyundai Motor: See exports growth momentum continuing in near future
--Hyundai Motor: Worst is behind us, co looking forward to festival season
--Hyundai Motor: Sedans, hatchbacks helping co meet emission
--Hyundai Motor: Offered 3.4% discount on vehicles' average selling price Q1
--Hyundai Motor: Raised average selling price, kept discounts in check in Q1
By Ashutosh Pati and Anand JC
MUMBAI/NEW DELHI – Despite weak performance due to soft demand in the June quarter, Hyundai Motor India Ltd. expects domestic demand to improve in the coming quarters on the back of a long line-up of festivals in the country. "... we are now entering the festival (season) so we have every reason to believe that the worst is behind us," the company's management said in a post-earnings call with analysts Wednesday.
The company believes that the effect of the festivals will be visible in both the second and third quarter of 2025-26 (Apr-Mar). Stimulus measures from the government, such as interest rate income tax relief and salary hikes, are also expected to drive improvement in domestic demand. Hyundai Motor's management also expects the strong momentum in its exports to continue in the coming months. "We would like to position ourselves as the manufacturing hub for the emerging markets," they said.
The company's wholesale sales in the June quarter declined 12% on-year to 132,259 units. Of this, exports rose 13% on year to 48,140 units. Better model mix in India, favourable mix in exports, and material cost optimisation boosted the company's gross margin in the June quarter, its management said. However, higher discounts compared to a year ago impacted Hyundai Motor's profit margin during the quarter.
The company's profit margin for the June quarter was 8.2%, compared with 8.5% in the year-ago quarter and 8.9% in the March quarter. The fall in margin from the trailing quarter was largely due to "the tail-ended impact of government incentives and enhanced discounts in the domestic market in response to the overall market dynamics," the management said. Hyundai Motor offered a discount of 3.4% on the average selling price of its vehicles in the June quarter. The management said the company managed to increase the average selling price of its cars year-on-year while keeping discounts under check.
Hyundai Motors achieved the highest-ever rural penetration of 23% in the June quarter. The Creta maker said that they are witnessing a paradigm shift in the demand for sports utility vehicles in rural areas, with nearly 69% penetration in these regions in the quarter ended June. "... today, rural customers have also become aspirational. And I think one key reason for that is that the road infrastructure has improved tremendously. Earlier, if you see, rural customers were very hesitant to buy a premium car because they were not very sure about the reliability, because the road infrastructure was bad," the company's management said.
Hyundai Motors currently has 586 service networks in rural areas. The automaker said that 47% of its network is in rural areas while 53% is in urban. However, the company is making seven out of every ten outlets in the former.
Hyundai Motor has expedited its network in rural areas amid increasing demand for sport utility vehicles there. The demand for SUVs in the country is strong, while it is declining for hatchbacks and is flat for sedans, compared to the year-ago period. The company has enhanced its compressed natural gas adoption, resulting in the highest-ever CNG contribution of over 16% in the June quarter. The dual-cylinder technology and the introduction of new CNG variants have also supported this, the management said.
Besides increasing its sales volume, an increase in CNG contribution has also helped the company to meet the Corporate Average Fuel Efficiency norms. The company said sedans and hatchbacks continue to play an important role in its portfolio as they help it meet threshold limits laid out in CAFE norms. On Wednesday, shares of the company closed 0.7% lower at INR 2,086.70 on the National Stock Exchange. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000 /+91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
