Hyundai Eon launched at Rs. 2.69 lakh, to take on Alto

Korean auto major Hyundai Motor Company on Thursday launched entry-level compact car Eon that has been developed specifically for the Indian market, at an introductory price of between Rs. 2.69 lakh and Rs. 3.71 lakh.

The company, which operates through wholly owned subsidiary Hyundai Motor India Ltd (HMIL), said the car has been designed and developed keeping Indian consumers in mind.

The Eon, which will compete with Maruti Suzuki India's bestselling model Alto, is powered by a 814 cc petrol engine. Alto is priced between Rs. 2.32 lakh and Rs. 3.17 lakh (ex-showroom Delhi) and is the bestselling car, averaging about 20,000 units a month.

Brokerage house Credit Suisse has given a 'sell' call on Maruti with a target of Rs. 1,108. It goes on to say that Hyundai Eon is a serious threat to Maruti Alto and could lead to potential loss of market share for Maruti.

"Eon has been specifically built keeping in mind the varied Indian conditions and special requirements of the customers here. It will further expand our market share in the fast-growing small car segment in the Indian market," HMIL Managing Director and CEO H W Park said.

HMIL Senior Director marketing and sales Arvind Saxena said the company has plans to produce up to 1,50,000 units of the Eon on a 12-month basis.

HMIL has invested Rs. 900 crore on the development and production facilities for the Eon.

Asked about export plans, Park said: "Later on, we may consider exporting the Eon to markets in South America and South Africa but the present focus is on the Indian market."

Park said with the launch of Eon, Hyundai Motor India Ltd (HMIL) is looking to enhance its share in the Indian car
market.

"Currently, we have a market share of about 18.6 per cent and we are looking to increase it to about 20 per cent with Eon," he said.

The Indian passenger car market stood at 19,82,702 units in 2010-11, as against 15,28,337 units in the previous fiscal registering a growth of 29.73 per cent. He said HMIL will also expand its dealership network as the firm looks to spread presence across India to about 400 dealers by 2015, up from the present 340.

Besides, HMIL will also marginally increase its total production capacity to 6.7 lakh units a year by next year from the current 6.32 lakh units per annum. "The investment on this will be minimal," he said.

Besides Hyundai, other car makers are also lining up new launches for a pie in the hottest (by volumes) segment. Tata Motors is developing a car sized between Nano and Indica. Volkswagen's 'Up' is also expected to debut in India by next year. And encouraged by the success of Figo, Ford is developing another car below Figo's price point.

Though auto sales have slowed down because of rising interest rates and petrol prices, sales of small cars are still robust, meaning small cars are still 'big' in India.