Hyundai is evaluating the case for a low-cost version of the Santro to cater to first-time car buyers and to customers looking for a budget hatchback. The Korean carmaker does not have a model in the entry-level segment, following the discontinuation of the Eon around October 2018.

Also, Hyundai’s new Santro is no longer the entry-level car that the Santro Xing was until 2014, the year it was discontinued. This is because the company believes the market is moving upwards, with a lot of modern-day buyers prioritising the comfort and features of a small car over its price. "We are witnessing a trend where a lot of entry segment customers are moving upwards. There is a huge demand and potential for growth there," said Seon Seob Kim, MD and CEO, Hyundai Motor India.

However, Hyundai does not want to lose out on a significant number of first-time car buyers who still prefer an entry level hatchback; cumulative sales of the Eon, Wagon R (previous gen), Maruti Alto and Renault Kwid stood at 4,70,482 units in FY2019.

But developing a new model, which will have to conform to the stringent crash-test regulations, will prove to be a cost-heavy exercise. That's where the stripped-down Santro comes in. The low-cost version will also enable Hyundai to effectively compete with the popular Alto. With a starting price of Rs 3.90 lakh (ex-showroom, Delhi) for the Santro, Hyundai is presently left with no answer to the Alto, which is India's bestselling car.

Hyundai could bring down the price of the stripped-down Santro through the combination of some brutal cuts (in terms of equipment and features) and a slimmer profit margin. The current base model, the Santro D-Lite, is already light on equipment. In fact, it misses out on an AC. Although it is not yet confirmed, Hyundai could even take away the dual-tone beige and black interiors. But customers will, however, continue to get a fresh upmarket design and Hyundai’s new ‘cascading’ grille that made the Santro more stylish than the previous car.

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