Hyundai India may set up new plant, could share facility with Kia Motors

Hyundai’s existing plant in Chennai is running at its full capacity

By: | Updated: May 24, 2016 8:49 AM
Hyundai-Re Hyundai’s existing plant in Chennai is running at its full capacity as demand for its products like Creta (SUV), Elite i20 (a premium hatchback) and Grand i10 (a hatchback) have been very high not only in the domestic but also in the international markets. (Reuters)

The country's second largest car maker, Hyundai Motor India, which has been facing capacity constraints for quite some time now, is planning to build another plant for which it is in talks with some state governments.

Industry sources told FE that the new plant which the company plans to build will be shared with its global subsidiary, Kia Motors, which may enter the domestic market in the next three years.

“Hyundai Motor wants to increase its share in the domestic market and with the entry of Kia Motor, it will be able to address the existing gaps in its product portfolio,” sources said.

However, when contacted, Hyundai Motor denied that it has any plan to start a new manufacturing facility at the moment. It did not say anything regarding entry of Kia Motors. “We would like to affirm that Hyundai Motor India has two manufacturing plants in Chennai with a capacity of 7 lakh cars per annum. At the moment, we have no plan to start a new manufacturing facility,” the company said in response to an email query from FE.

Hyundai’s existing plant in Chennai is running at its full capacity as demand for its products like Creta (SUV), Elite i20 (a premium hatchback) and Grand i10 (a hatchback) have been very high not only in the domestic but also in the international markets.

To meet the demand in the domestic market, the company has already reduced its exports.

Kia Motors is the second largest car manufacturer in South Korea after Hyundai and the company wants to replicate the same model in India. “The Indian market will grow into one of the most significant automobile market in the days to come. So, most of the automobile manufacturers are taking steps which may help consolidate their position in the future. Every one is trying to have a long term strategy for the Indian market,” said a market expert.

According to industry experts, Hyundai needs more products to compete with the market leader and introducing one of its successful subsidiaries in one of the fastest growing automobile market looks to be a prudent decision.

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