Hyundai ends production of its entry-level hatchback Santro; here's why

The country’s second-largest automobile manufacturer Hyundai Motor India has ended the production of its entry-level hatchback Santro at its Tamil Nadu plant due to low demand. Hyundai Santro, which was launched in India in 1998, was the first car introduced by the Korean carmaker to the Indian customer.

The automaker sold the first-gen model till 2014. However, after a hiatus of almost 4 years, it brought back the Santro, with new-gen updates, in October 2018. But when the company’s sales didn’t meet its expectation with the model's resurrection in 2018, Hyundai has now decided to pull the plug on the hatchback and consolidate its resources and further minimise supply chain constraints.

Moreover, according to reports, while the Santro’s petrol offering is discontinued, the CNG variant will continue to be sold. There are also reports that the dealerships will still be selling petrol versions until the stocks last.

Hyundai Santro managed to sell around 2,000 units in FY22. Interestingly, this hatchback was among the Hyundai’s best-selling cars at one point in time and was accounting for almost 76 per cent of its total sales.

Hyundai’s revamped Santro, in 2018, was sold at between Rs 3.9 lakh to Rs 5.5 lakh. This new Santro had received new design cues and was also available with a factory-fitted CNG option for its 1.1-litre petrol engine.

Hyundai even tried to position the Santro hatchback at the higher end of the budget segment and complimented it with features like a touchscreen infotainment system and rear AC vents. However, the entry-variant of the car was still on the pricier end and lacked basic features like factory-fitted AC. Hyundai had also priced the newly launched Santro’s higher variants above the Grand i10, which is also discontinued but was more spacious and had a more powerful1.2-litre engine.

Later in 2019, Hyundai tried to reposition Santro’s lower variants to go up against the offerings in the country’s entry-level hatchback segment like - Alto and Renault Kwid. But due to the arrival of tougher BS-6 emission norms, higher input costs translated into higher prices.

Currently, due to the rising input material costs in the wake of the COVID-19 pandemic, semiconductor shortages and the Russia-Ukraine war, almost all the carmakers have increased the prices of their respective models by up to 30 per cent.

And with the government’s upcoming mandate to offer six airbags as standard, cars' costs would've risen even higher, thus Hyundai would be forced to increase the hatchback’s price even more. Apart from this, Indian consumers' growing preference for SUVs or compact SUVs could also be among the reasons for Hyundai pulling the plug on its hatchback Santro.