Failure of Hyundai Santro in Pakistan

It all started with just one man, a small repair shop and an insistence on delivering quality that still endures today.This is the story of Chung Ju-Yung. Born the son of a peasant farmer, Mr Ju-Yung launched Hyundai in 1947 at the age of 32. At first it was a small vehicle repair shop. Then it grew, and became the Hyundai Auto Service Centre. 20 years later, Hyundai vehicle assembly was born. The Pony hatchback soon followed, and today, Hyundai is the fifth largest car manufacturer in the world.

The Hyundai Atos (also known as Santro) is a city car produced by the Hyundai. The original Atos was introduced in 1997. It uses the G4HC Epsilon straight-4 engine. The mkII version comes with a 1086 cc G4HG engine. Santro was launched in Pakistan in the Year 2000 and was a huge success due to many of its economical features. The first generation (1997-2000) Santro was introduced in 1997. It is fitted with a 999cc engine and has a top speed of 90 mph (145 km/h). It was succeeded by a facelift version by 2000. The second generation was introduced some time in 2003. This is the current version. It is named as Santro Club. This generation of Santro was introduced in PAKISTAN having an EFi which was very much new in this class considering the local market. The engine of Santro received positive reviews from customers through out Pakistan when compared to its main rivals.

Top Speed of Santro according to collected data from different sources is:

• 145km in CITY DRIVING without AC.
• 120km in CITY DRIVING with AC.
• 175km on HIGHWAYS without AC.

Hyundai Santro is a good small car which offers a lot for the price the customer pays for it. The interior space is very good and offers excellent headroom and legroom. We feel at home inside Santro but seating position is never comfortable. Though thigh support is good, the upright sitting position takes a toll when you go for a long drive. The acceleration of this car is a bit slow and it takes some time to catch speed. It takes approximately 16 seconds to reach from 0 to 100 KM/H.

Reasons for Failure of Santro in Pakistan

Hyundai Santro has overall performed well in Pakistan but it had some shortcomings due to which it is decided by the company not to launch new Santro models in Pakistan. Actually the Hyundai Santro lacked in the following fields.

Product: What is Product?

Product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. Products include more than just tangible goods. Broadly defined, products include physical objects, services, events, persons, places, organizations, ideas or mixes of these entities. Services are a form of product that consists of activities, benefits or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. Today companies are creating and managing customer experience with their products.

Levels of Products and Services

Product planners need to think on three levels:

1. Core Benefits: this addresses the question “what the buyer is really buying”. At this level, marketers must define the core: problem solving benefits or services that consumer seeks.
2. Actual Product: at this level, the core benefits must be turned into actual products. Products planners need to develop product and service features, design quality level, brand name and packaging.
3. Augmented Product: finally at this level, the product planner must bundle the products with services. They must build an augmented product by offering additional consumer services and benefits.

Price: price of Hyundai Santro is relatively high in Pakistan as most of the people can not afford expensive cars. The price for Santro EXEC GV CNG in Pakistan is PKR 839,000. This cost is very high for a small car in Pakistan. Other cars can be bought at the same price level, which are bigger than Santro.

Place: Place is a very important thing for the successful sale of a product. Now the problem with Santro is that it is a sophisticated car, which cannot remain durable on the broken roads as in Pakistan. Hyundai should have introduced a car which could be more durable and reliable in Pakistani conditions.

Promotion: A very important feature is missed by the Hyundai Santro promoters. They failed to properly advertise the car in Pakistan. The promoters should have used TV ads for advertising, such as in other countries some famous celebrities are contracted for the promotion. Apart from TV no billboards, hoardings and banners were used for the promotion purposes. 

Following are the few more reasons why Santro has failed to continue in Pakistan.

• Little space for the driver’s feet for operation of accelerator, brake and clutch. It is very difficult for a person of good height to adjust in the car.
• Less space for the passengers sitting on the back seat. No more than two people can sit on the rear seat.
• Spare parts are quite expensive than those of the other brands of cars of same class. They are not easily available.
• Hard steering and is difficult to turn the car in populated areas which causes a lot of accidents.
• Not a fuel/cost effective car gives low mileage per gallon. It consumes a lot of fuel in low mileage.
• After sale service and spare parts is not upto the mark. Very few dealers have the required parts. The spare parts are also very expensive.
• Do not have good pickup on CNG if AC is on.
• Resale is not very good.
• AC does not work properly on CNG.
• Its body is not strong that is why it faces a huge body damage in accidents.
• Its clearance is too close to the ground. It bumps with the speed breakers.
• It is expensive as compared to other small cars.
• Its shape is not very attractive.
• Wiring is not done professionally.
• Engine makes a lot of noise after few years.
• The company was facing loss by the production of this car.
• It is not very durable. People with low income cannot afford this car.
• Its maintenance is very expensive.
• Its engine throws a lot of smoke after heating up.
• It heats up very quickly in summer.
• It’s not comfortable for long journeys.

These were the reasons due to which the Santro car suffered in Pakistan. If these problems had been covered, then this car would have generated a lot of income for the company.