Hyundai Santro production ends for the second time; could be replaced by a micro-SUV

Hyundai has ended the production of its entry-level Santro hatchback at its Tamil Nadu plant. The Santro was the car that had introduced Korean carmaker to the Indian customer back in 1998, and its first-gen model was on sale till 2014. Citing huge brand recall, Hyundai reintroduced the Santro brand in October 2018 on its Eon-replacement (AH2) hatchback.

• Hyundai Santro goes off-shelf for the second time
• Around 1.5 lakh units of the Santro sold since 2018
• FY2022 sales averaged at just around 2,000 units

Hyundai Santro: What really went wrong?

Hyundai reintroduced the Santro in 2018 with a starting price of around Rs 3.9 lakh, going upto Rs 5.5 lakh for the top variant. At launch, the Santro had fresh design cues and was even sold with a CNG option for its 1.1-litre petrol engine. While Hyundai positioned the Santro at the higher end of the budget segment with features like rear AC vents and a touchscreen, the car still lacked a few basic features like intermittent windshield wipers in all variants.

The entry-variant of the Santro was pricey and even lacked a factory-fitted AC at that price point. Also, the Santro’s higher variants at launch were priced above the now-discontinued Grand i10, which was more spacious and came with a more powerful1.2-litre engine.

Hyundai even looked at repositioning Santro’s lower variants in 2019 to take on the entry-level hatchback segment that includes stalwarts like the Alto and also the 800cc Renault Kwid. But the advent of the stringent BS6 norms resulted in higher input costs translating into even higher retail prices.

Sales for the Santro peaked initially, but since then it has mostly been on a downslide and customer interest has been dwindling away from Hyundai’s entry-level offering. Also, the shifting consumer trend towards SUVs or SUV-like high-riding vehicles could be one of the reasons for the Santro’s demise. Maruti Suzuki gauged this trend much earlier and replaced its slow-selling Alto K10 with the S-Presso high-riding hatchback with SUV-like styling cues. Sales of the S-Presso stood at around 67,000 units in FY2022, which averages to around 5,500 units a month. Meanwhile, Santro’s sales for FY2022 averaged at just around 2,000 units.

Also, the recent government announcement on the mandatory fitment of six-airbag could be another nail in the Santro’s coffin as Hyundai will have to re-engineer the car to meet the requirments, and the additional costs would simply not justify the car’s positioning. Additionally, with upcoming BS6.2 emission norms, upgrading the 1.1-litre engine, which is only available on the Santro, won’t be financially justifiable.

Hyundai’s entry-level vehicle for India: What’s next?

Thanks to the demise of the Santro, the Grand i10 Nios will be Hyundai’s entry-level model for India for now. The hatchback starts at Rs 5.39 lakh (ex-showroom). There are talks of Hyundai introducing a micro-SUV under the Venue (also due for a facelift soon), which, with its high riding character, could be the future Santro of SUVs.

What are your thoughts on Hyundai discontinuing the Santro in India? Let us know in the comments below.

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