Will the higher potential price tag of the Ai3 eat into Hyundai's own sales of the Grand i10 Nios?

Question

The Ai3 is Hyundai positioning it as an SUV alternative to the Grand i10 Nios but early reports indicate that it will be priced slightly higher than the hatchback sibling. The idea is to cash in on the rising Indian appetite for SUV like vehicles. But it also begs the question of possible internal competition in Hyundai's lineup. Hyundai has sold the Grand i10 Nios steadily, as a practical, well equipped hatchback for buyers. However, the Ai3 now comes with a similar package in a more trendy SUV inspired design, which could eat into the Nios's market share. Could Hyundai be shooting itself in the foot by offering two very similar sized and priced vehicles? Or is this yet another calculated move to cover all bases in a rapidly changing market? This would have what impact on the overall sales strategy of Hyundai and the future of Grand i10 Nios?

Sachin · Accepted Answer

But it’s a risky move and I think Hyundai knows what they are doing. The Nios will probably attract a different type of buyer than the Ai3.

Rajat · Answer

Nios sales are definitely going to be hurt by this. If all you can do is get a hatch for a little more, why get a hatch?

Rahul · Answer

It’s just Hyundai adapting to the market. If they're not going to offer an SUV in this space, someone else will. It’s better to cannibalize your own sales than lose them to a competitor.

Rahul · Answer

I believe that in terms of features and marketing they'll differentiate the two enough. The Ai3 might go premium, while the Nios could become budget focused.

Akshat · Answer

And it’s not only about the product itself, but also about the production capacity. It could be that Hyundai is trying to phase out Nios slowly and replace it with Ai3.

Lokesh · Answer

In fact, this could actually work in Hyundai's favor. The Ai3 might be what they come in for, but if they're cheaper they'll buy the Nios. It’s always good for more footfall in showrooms.

Awadhesh · Answer

I fear this will result in cost cutting on the Ai3 to keep prices apart. I hope they won’t sacrifice on quality.

Awadhesh · Answer

The real question is what this means for Venue. If the Ai3 is so good, perhaps it will cannibalize Venue sales and not Nios sales.

Shantanu · Answer

Don't forget that hatchbacks do still have their advantages: easier to park, better fuel efficiency. There’s still a case to be made for the Nios to attract a particular segment of buyers.

Bhawesh · Answer

This may be part of a bigger plan to retool Hyundai's whole lineup. We could see bigger changes coming in the next few years across all segments.

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