Nearly two decades after setting foot in India, Korean car major Hyundai has decided to pump in fresh investment of over Rs 4,500 crore for a new factory to boost its production capacity to over a million vehicles.
Hyundai has been facing a capacity crunch at its existing facility near Chennai, but is now "close" to finalizing a new premises which will house the new factory. States lobbying with the Korean company include Gujarat, Rajasthan and Andhra Pradesh. The lobbying has been hectic after Hyundai Motor Group's global chairman Chung Mong-koo said in May that the company is "reviewing" plans for a new factory in India. He had said this after meeting Prime Minister Narendra Modi at Seoul.
The company may be reluctant to expand around the existing location considering that it faced a lot of labour unrest there in the past.
"We are closely watching... India is a future market for the brand and we will expand here," company MD and CEO B S Seo told TOI. "To begin with, we may start with a capacity of 3-4 lakh units annually, but this will be scalable."
Hyundai will become the second car company in India to have over one million production capacity after Maruti Suzuki. Indian operations contributed 14.5% to Hyundai's global sales last year and Seo said this is set to grow as the company launches new models and expands its retail presence.
Hyundai has been beefing up its product portfolio and new cars include the Elite i20 premium compact, Xcent entry sedan and the recently-launched Creta compact SUV. "We will look at two-to-three new cars every year," Seo said, adding that a multi-purpose vehicle is next on the cards. Hyundai has a 16.6% share in the domestic passenger vehicle category.