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Till 1980, Indian car market had just 2 models :
Vmbassador from HM
VFiat Padmini from P
The GOI dictated as to what type of vehicle the 2 companies should manufacture.


  å GOI ͚s decision to keep the car industry tightly protected.
No other domestic or foreign co. was allowed to enter the industry.

  
 
V Poor technological improvements in Indian cars.
V Car prices remained high, while quality was inferior.
This affected the growth of industry. CGR over 2 decades(1960-80) was just 3.5%.

In 1980 GOI allowed a joint venture b/w Suzuki & MUL.

In 1983, MUL launched a small and affordable car ͚Maruti 800͛ at price of Rs 40K.
This fuelled the growth of Industry. CGR over 1 decade(1981-1990) was 18.6%.

Finally In 1993, the GOI de-licensed the automobile industry and allowed entry of
domestic and foreign car manufacturers.
 |
   
ntered in Indian car market through its subsidiary HMIL in 1996.

Before making its move, the company-

V Closely studied the industry for an year
V Talked to vendors, dealers and customers to get a thorough knowledge of the
industry.
V Conducted a survey, where customers were asked to rank their preference for
cars by the country of origin.

HMC initially wanted to introduce ͚ccent͛ as its first car in India. However they
ended up launching ͚Santro ͚as the first car.

May26, 1996 HMC established its plant in Tamil Nadu , near Chennai @ 614Mn.
Plant had a capacity of producing 1.2 lakh cars and 1.3 lakh engine trans. units P.

HMC͛s foray into Indian car market was unique in 2 ways:

V HMC set up its wholly owned subsidiary, HMIL.
V First foreign car manufacturer to establish a ͚manufacturing unit͛.
 2

 2 

V HMIL͛s first car, ͚Santro͛ rolled out in record time of 17 months.

V Priced @ Rs 2,89,000 it was placed in B segment of the Indian car industry.

V nalysts did not predict its success, because they felt the car lacked an elegant,
appealing look, moreover the B - segment was dominated by Maruti zen at that time.

V Contrary to expectations, Santro became a major success, selling 75,000 vehicles b/w
pril 1999 å March 2000 becoming the largest selling car in B segment.

V With the success of just one model, Hyundai became second largest automobile
manufacturer in India, across segments
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0.56mn

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