FOR SOUTH KOREA’S Hyundai Group, a conglomerate whose line-up ranges from cars and trucks to yachts and supertankers, 2024 was memorable. Its Indian subsidiary, Hyundai Motor India Ltd., manufacturing in India for 26 years, was listed on the stock markets and raised a record $3.3 billion (₹27,743 crore). The IPO, the first by any Hyundai subsidiary outside South Korea, became Dalal Street’s largest.

It was in 1996 that Hyundai, practically unknown in India, bet big by entering solo. By 1998, its new factory was rolling out the Santro hatchback in a market crowded with new entrants such as Korean rival Daewoo, Japan’s Toyota and Mitsubishi, and U.S. majors Ford and General Motors. Maruti Suzuki, which had brought modern car-making to India in 1983, was the unrivalled leader.

The bet paid off. Today, HMIL is India’s second-largest passenger vehicle manufacturer after Maruti Suzuki and the second-largest exporter. (Parent Hyundai is the world’s No. 3 carmaker by units sold.) In the first half of FY25, Hyundai had 14% of India’s car market and accounted for 23% of car exports.

Santro, The Successful Ride

What powered HMIL’s success? The Santro. This ‘tall boy’ was the first hatchback that had plenty of headroom and did not require you to crawl into it, a feature highlighted by a slick ‘show-not-tell’ TV commercial featuring Shah Rukh Khan.

In six months, HMIL was India’s second-largest car maker. It went on to roll out a flurry of models: the sedan Accent in 1999, the luxury sedan Sonata in 2001, the SUV Terracan in 2003, the Getz in 2004, Tucson in 2005 and Verna in 2006, apart from Santro variants. By 2006, it had made its millionth car in India.

HMIL now has 13 models across all major segments: hatchbacks (Grand i10 NIOS, i20 and i20 N Line), sedans (Aura and Verna), and SUVs (Exter, Venue, Venue N-Line, Creta, Creta N-Line, Alcazar, Tucson and IONIQ 5).

By June 1, 2024, HMIL had 1,377 sales outlets across 1,036 cities and towns and 1,561 service centres across 957 cities and towns. Maruti Suzuki, the largest carmaker, had 3,368 sales outlets, including the exclusive ones for the premium Nexa and the new dealerships branded Arena. Maruti has over 4,964 service centres.

In August 2019, HMIL’s sister concern, Kia Motors, made a well-researched entry, little knowing that the industry was getting into its worst slowdown. Kia’s first compact SUV, the Seltos, grabbed eyeballs and wallets. Soon, the Kia Seltos loomed large in the rearview mirror of the elder sibling, the Hyundai Creta. By April 2024, the Seltos was India’s third-largest compact SUV by sales after the Creta and Maruti Suzuki’s Grand Vitara. During CY2024, Kia India sold 2,55,038 units in India and exported 25,404, with the Sonet fetching most of the numbers.

Hyundai and Kia are expected to roll out more premium vehicles, hybrid cars, and SUVs, which generate higher margins. (HMIL is synonymous with Creta, a subcompact crossover SUV, or an SUV with the lighter body of a car, that it launched worldwide in 2015.)

Premiumise, customise

HMIL’s strategy: premiumise, customise, make what Indians want, and keep sticker prices attractive. And, of course, electric vehicles or EVs.

HMIL is now getting into the premium-end of EVs, challenging entrenched players Mahindra & Mahindra and Tata Motors. It launched the Hyundai Creta Electric at the Bharat Mobility Global Expo 2025 and will roll out three more models by FY29.

“Creta Electric marks a defining moment in HMIL’s journey of electrification and reflects our commitment to the government’s ‘Make in India’ vision, as it is our first indigenous EV SUV in India,” Unsoo Kim, MD, HMIL, said at the launch on January 17.

Kim told Fortune India HMIL sees the EV market growing 20-30% by 2035. “It aspires to be a leading company in India,” he said.

After scaling back in China to local rivals such as BYD, Hyundai wants to use India as a manufacturing hub. HMIL has invested ₹30,103 crore ($5.09 billion) in India since 1998, building its largest manufacturing base and second-largest supply chain ecosystem outside South Korea. HMIL has two manufacturing plants in Tamil Nadu and bought a GM plant at Talegaon in Maharashtra last year.

Tarun Garg, whole-time director and COO of HMIL, says, “HMIL’s domestic and export sales contribute around 18% of Hyundai Motor’s global sales.”

In calendar 2024, HMIL achieved its best yearly domestic sales for three consecutive years: 6,05,433 units. Domestic plus export sales were 7,64,119 units, as exports fell marginally.

HMIL’s SUV models accounted for nearly 68% of its total sales in CY2024, followed by CNG models (13%). The Creta continues to be the best-selling Hyundai model in India since its 2015 launch, with domestic sales of 1,86,919 units, its highest ever. In FY24, HMIL sold 7,77,876 cars (6,14,721 units in India) and the rest exported.

Garg says HMIL will continue to focus on premiumisation and SUVs. Premiumisation, including advanced features such as sunroofs and advanced driver assistance system (ADAS), was a hit: Sales of sunroof models were up 53%, and ADAS adoption 15% in 2024.

EVs For Everyone

On EV innovation, Garg says HMIL was among the first carmakers in India to introduce EVs with the KONA and then the IONIQ 5. “Now we plan to have a holistic approach which aligns with India’s EV roadmap through a three-pronged strategy — EV for everyone, enhancing EV infrastructure, and local battery ecosystem,” he says.

Hyundai will localise the EV supply network from battery systems to cells, and take the initiative to install fast chargers. It has forged partnerships with Exide Energy Solutions to make batteries in India and with Charge Zone to install 60 kW fast chargers. The company has signed an agreement with Tamil Nadu to invest ₹20,000 crore over the decade from 2023.

What Lies Ahead?

Garg sees hope in India’s low car density of 35 per 1,000 people and steady demand. He attributes this steady demand to a burgeoning consumption class and a rising Gen Z workforce prioritising smart mobility.

HMIL does not want to miss out on the biggest mobility market: three-wheelers (22 lakh units). It is ready to offer innovative designs if it can find a manufacturer and is in talks with TVS Motor to make electric three-wheelers. For a micro four-wheeler, a partner has yet to be identified.