Will the 2020 Hyundai Creta outsell the Kia Seltos?

Hyundai & Kia are actually sister concerns (Hyundai helped Kia out of bankruptcy), but make no mistake, it is absolute WAR between their Indian subsidiaries. The Creta was pretty much the best-selling crossover in the 10 - 20 lakh segment, until the Kia Seltos walked in and literally dominated the market. No one - not even Kia - expected the astounding response that the Seltos received. Hyundai was obviously startled and from being in a leading position, the parent company went on the back foot.

Now, Hyundai has responded with the 2020 Creta. Will it outsell the Kia Seltos? Before we discuss the same, I wanted to add an important consideration = all said and done, sales from both cars benefit the same South-Korean group. We have never seen a situation in India where the same consortium controls a premium segment with such strength. The way things are looking, the Creta + Seltos might have 2/3rd to 3/4th market share of this category. Between the two of them, we fully expect 20,000 sales. That is a monthly gross of about Rs. 3,000 crores...or 36,000 crore rupees annually! Got your attention? Can you imagine Rs 36,000 crores from what is essentially the same car? Poor Maruti - which has no answer in this segment - is salivating at the thought.

Needless to say, the higher the segment, the greater the profit. For instance, if a company makes a profit of Rs. 25,000 on the sale of a hatchback, a C2-segment SUV can even fetch you 2 lakhs! Importantly, the C2 segment cars are within the reach of the middle-class, hence giving it fantastic volumes. Get your product right in this segment and you will have long innings.

Kia sure did its research before entering India. The company got everything spot on, including the product, price, variant spread & marketing. Since it went on sale in August 2019 till March 2020, Kia sold 81,984 units of the Seltos, even topping out @ 15,000 units in January 2020. Among the cars that suffered a drop in sales due to the Seltos’ success was the Creta – Hyundai managed to sell a less impressive 47,614 units of the car in the same period. From ~10,000 units a month, sales fell to ~6,000 units per month. There is no doubt that the Creta, though a competent product, was ageing and the Seltos with its aggressive looks, more modern interior and a new set of features had very little trouble in luring customers away.

Hyundai launched the 2nd-generation Creta, just before the Covid-19 lockdown (bad luck & bad timing). Mechanically, you could say that the two cars are almost identical, with the few differentiators being a bit of tuning + brand + dealer network + design + features. What do you think? Will the Creta outsell the Seltos? Believe me when I say this, Hyundai has put all of its ammunition in pushing the Creta now.

Team-BHP’s May 2020 sales report shows that the new Creta is ahead, but then, it’s not been a normal month at all. Therefore, let’s ignore those sales numbers. Instead, we should be looking at the sales figures over a longer period (say, 12 months).