Hyundai India’s Eon Taking on Maruti Suzuki’s Alto

MUMBAI – Hyundai India launches the Eon with an eye on challenging its small-car rivals in style, design and engineering as well as price and performance.

The auto maker’s primary target is Maruti Suzuki’s highly successful Alto, of which 347,000 units were sold last year and 142,000 in the first half of this year. Alto dominates India’s small-car market, with 1.7 million units delivered over the past 11 years.

Hyundai Eon arrives in India’s small-car market.

The Eon is 5 ins. (12.5 cm) shorter than the Alto and is more expensive: The basic D-Lite model costs Rs280,000 ($5,600), some Rs48,000 ($980) more than its competitor. Eon’s high-end Sportz is priced at Rs372,000 ($7,600).

The Eon offers six gasoline-engine variants, while the Alto has five gasoline and two compressed-natural-gas powerplants. Prices increase at every stage. All Eons run on a 0.8L 3-cyl. engine, while Alto mills range from 0.8L for base models to the K10 (1.0L) at the high end.

“Hyundai doesn’t want to start a price war,” says Arvind Saxena, marketing director-Hyundai India. But the auto maker believes Eon holds its own against Alto in looks, features, performance and value.

The Eon’s fuel efficiency is rated at 49.6 mpg (21.1 L/100 km) to Alto’s 46.3 mpg (19.7L /100 km).

Hyundai says the Eon produces more power and torque and is wider and higher than the Alto – providing better seating comfort and visibility.

"(The) Eon will set a new benchmark in India with best styling, performance, safety and convenience in its segment," says H.W. Park, Hyundai managing director and CEO.

The Eon stands out against boxy small cars with a sleek, sporty look achieved by advances in steel fabrication that shape small panels into sedan-like curves. “We used Indian iconography and silk patterns for the curving lines.” Hyundai chief designer Casey Huan says.

Hyundai spent four years and Rs9 billion ($180 million) developing the Eon specifically for the Indian market. The auto maker’s targeted customers are young, aspirational first-time car buyers.

The Alto, however, stands in Eon’s pathway toward success.

Hyundai believes it has replicated Maruti Suzuki’s price-performance formula for an entry-level product. The Korean auto maker also intends to emphasize the Eon’s design flair and take advantage of Maruti Suzuki’s ongoing labor unrest.

Maruti Suzuki production dropped 33% in September from like-2010, and some of its plants have been closed for many days this month. The auto maker nevertheless has a 43% share of the market to Hyundai India’s 20%.

Hyundai India produced 670,000 units last year, including 240,000 for export. The auto maker plans to sell 150,000 Eons in the first year of production, then export the car to South America, South Africa and Southeast Asia.

“We will be able to manage for the present by diverting exports towards the local market but will consider fresh investment in capacity by 2013,” Saxena says.

Hyundai India also plans to broaden its customer base by adding 1,000 branches and 300 service points to its rural dealer network.

Maruti Suzuki is unfazed by its current troubles, countering the Eon with an upcoming 0.8L small car. Its teaming with the Alto may leave the Eon hard-pressed to make significant inroads in the segment.

“Maruti is a brand to reckon with in compact cars,” marketing chief Shashank Srivastava says. “No one can beat us on low cost of ownership and higher resale value.”