The Light Is Green: India auto industry update (Part 8): Hyundai in India

As a provider of dealer management systems to automobile dealerships in several emerging markets, we closely follow what happens in the auto industry in key regions around the world. I thought it might be interesting to share some of that information.

In the world's major markets, auto sales are slowing at the same time that competition increases, so global auto manufacturers are setting their sights on big emerging markets like the BRIC countries: China, Russia, Brazil and India.

This series briefly discusses the promising future of the automotive industry in India. We've already looked at what GM, VW, Honda, Ford, Renault-Nissan, reigning king Maruti Suzuki, and now we'll look at fast growing...

Hyundai in India

Hyundai logo

Hyundai's subsidiary in India is called Hyundai Motor India Limited. They manufactured some 300,000 units in 2006, 186,000 of which were sold in the domestic market, 114,000 were exported. They grew 18.5 % compared to 2005.

Hyundai has one plant in Chennai with a capacity of 300,000 units per year.

They are setting up a second plant at a cost of some $600 million, that will be adjacent to their existing plant. It should be ready by the end of 2007, also with an output of 300,000 units a year. The plant will also include an engine and transmission facility. And some 20 Hyundai vendors are also to set up plants near the plant at a cost of $200 million.

Hyundai has said that they want their India operation to be their export hub for compact cars and are investing accordingly. Their goal is to export 300,000 cars a year in 2008, almost three times their 2006 figure.

"My only problem," Lheem Heung-Soo, managing director of Hyundai India, recently said, "is limited capacity."

They are also increasing their dealer network from 183 to 250, and plan to have 1,000 service shops throughout the country by the end of 2007.

Hyundai low-cost cars

Hyundai Santro Xing Hyundai, of course, is a player in the entry-level subcompact segment in India. Their offering is the popular Santro, which has a starting price of $6,300, and comes with standard features such as air conditioning and power steering.

As for the ultra low-cost segment that is currently a hotbed of action, Hyundai's Lheem Heung-Soo recently said that the company has no current plans to enter this segment.

Regarding Tata's announced $2500 "People's car", Lheem Heung-Soo recently said, “I want to wish the proposed players (Tata Motors) the best of luck but I have a lot of doubt.”

Hyundai Verna Hyundai currently offers these models in India: