Hyundai planning to utilise India facility to cater domestic and export markets

Hyundai is running its Chennai plant at almost 98 percent capacity utilisation and has plans to enhance whatsoever additional capacity it can muster from its Chennai plant. As of now, the brand has ruled out synergies with Kia Motors in the manufacturing process.

By: | Updated: December 23, 2019 11:35 AM
Hyundai to drive in new sedan Aura with BS VI compliant engines Image: Reuters

Hyundai Motor India is planning to utilise its existing India manufacturing facility to cater to both domestic and export markets. The company will be doing so over the next few years by adjusting volumes for both the verticals, according to one of the company's top officials. Hyundai is running its Chennai plant at almost 98 percent capacity utilisation is planning to enhance whatsoever additional capacity it can muster from its Chennai plant. For the time being, the company has ruled out synergies with Kia Motors in the manufacturing process. Moreover, if a new manufacturing facility is considered in the near future would take at least a few years to start rolling out first set of vehicles.

"In the short term, say over the next 3-4 years, I think we can manage the production capacity (from the current infrastructure) by leveraging domestic and export volumes," Hyundai Motor India Ltd (HMIL) MD and CEO S S Kim told PTI in an interview. This year demand being low in the domestic market, the company increased its export volumes by asking distributor partners in various markets to take volume from India, he added. "In export business area many countries are located in the Middle East and Latin America regions. They want some CKD product, so governments there want Hyundai to have some production base there...import components from India and asemble the vehicle there so those trends reduce the volume of CBU (from India)," Kim said.

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The South Korean automaker exported as many as 1,03,300 units to overseas markets during the April-September period this fiscal, up 19.26 percent from same period last fiscal. The company exports vehicles to over 90 countries across Africa, Middle East, Latin America, Australia and Asia Pacific. When asked if the company would like to collaborate with sister concern Kia Motors, Kim said: "We have no plans to share production capacity with Kia."

Elaborating on measures to augment product capacity at Chennai, he added that flexible production lines as well as introduction of other smart procedures would help the company to achieve its targets. HMIL has already increased the Chennai plant capacity to 7.5 units per annum. "98 per cent capacity utilisation is going to be the the facility...With more smart factory investments and more flexible lines that may also enhanced to 8 lakh units. That will all support us in our future endeavours," Kim said.

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