Pointing out that Santro sales have already reached a saturation point in terms of growth, HMIL executive director (marketing and sales) JH Kim said internal projections show that sales would dilute over the next few months.

"In fact, demand in the small car segment itself has already crossed the ceiling. It is very unlikely for the demand pattern to remain the same over the next half. We now feel that demand for cars in this segment would now come down," he added.

The company has maximum installed production capacity of 7,000 units per month, which can be extended to 8,000 units with the accent to be introduced next month.

Riding on the huge demand for the Santro, HMIL has projected to advance its break even in India by a year. The South Korean chaebol now expects to break even with itsinvestments in India this fiscal and start recording profits next year.

Pursuant to this, the company would be divesting a part of its equity in HMIL. "We would be selling off equity in the company next year. But it is yet to be decided whether we would go in for a public offer or privately place with a single party," Kim added.

HMIL had, in a presentation to some Indian banks a few months before its Chennai plant was commissioned, had projected a loss of Rs 151.72 crore for 1998-99. In 1999-2000, it expected to make marginal losses and in the first fiscal of the new millenium, it hoped to break even.

However, with the sales of Santro spurting, these projections have been altered and break even periods advanced. The company hopes to achieve breakeven at around 70,000 units.

Regarding the Accent, Kim said, initially the company expects to sell around 1,000 units of the car per month.

Hyundai had recorded a 41.5 per cent surge in sales during August 1999 to 7,002 units as against 4,949 units in July.With this, the company had crossed the 40,000 cumulative sales figure to settle at 42,283 units as on August 31, 1999.

Hyundai had notched up total sales of 33,835 units in the first eight months of the current calender year and is well on its way to achieve an annual sales target of 52,000 units.

The sales for the first five months of the 1999-2000 fiscal stood at 24,635 units as against 17,467 units in the last six months (October 1998-March 1999) of the 1998-99 fiscal.

Following the recent commencement of second shift production, the monthly output at the chennai plant has already been raised to about 7,000 units from about 4,500 units with single shift production.

Meanwhile, the company has decided to put off launch of the semi-automatic and non-airconditioned versions of its popular 999cc small car Santro. The decision to defer launch of the semi-automatic Santro, touted by the company as a high technology model, has stemmed from the lack of idle production capacity at its Chennai plant.

Kimsaid, "We have been testing the model for quite some time but our studies proved that the time is not right for introducing this version in India. Besides, with increasing demand for the Santro, we do not have idle capacity to accomodate another version. We need to satisfy the demand for existing models before coming out with a new variant."

HMIL was planning to introduce the semi-automatic version of Santro by mid-1999 and position it between a normal clutch driven and an automatic transmission vehicle. The model was designed keeping in view the demand from customers for a clutch-less vehicle.

However, the company is working towards introducing a multi-utility vehicle (MUV) and a sports utility vehicle (SUV) in India post year 2000. This would be part of the chaebol's second phase of operations in India through its wholly-owned subsidiary. "In the second phase, we are looking at infusing fresh equity from the parent company as also ploughing back profits from the Indian subsidiary," he added. When thesecond phase is completed, Hyundai would have invested $1.1 billion in India, among the largest by an automaker in the country.