Two separate reports in the Indian media over the weekend (26-27 July) suggested that India will become an even more important part of Hyundai's network, as the automaker will turn the country into the global production hub for its i20 model and invest a further US$250 million there by 2013.

India is quickly becoming the global production hub for all of Hyundai’s new small vehicles, following the introduction of its popular i10 model late last year. This has helped the automaker expand its Indian sales further, surpassing Tata Motors to become the second-largest passenger car manufacturer in the country.

The Indian passenger car market and exports are coming under pressure from a variety of factors, including high inflation, rising interest rates, and currency concerns. However, it seems unlikely that Hyundai will be affected unduly in the short term given the current strategy it has in place.

Two reports appeared in the Indian press this weekend (26-27July) highlighting the increasing importance of India in Hyundai Motor’s global strategy. The Economic Times was told by the managing director of Hyundai Motor India, Heung Soo Lheem, that the automaker wants "to use India as our small car hub", adding that "our upcoming i20 model… will be solely manufactured in India". He also told the publication that the launch of this model is scheduled for November and quashed reports that the Getz will replace it locally, saying, "We will strengthen our line-up giving more options to our customers." No local prices have been announced for the new model, but Lheem told the newspaper that it will be priced a little higher than the Getz, which sells for between 410,000 rupees and 590,000 rupees (US$9,575-13,780).

In another report in the Hindustan Times, a spokesperson for Hyundai said that the automaker is to invest a further US$250 million in India by 2013, raising its cumulative investment in the country to around US$1 billion. He also said that the company has raised its export target for the current year to 240,000 units, against an earlier forecast of 212,000 units, with 150,000 of these Santro and i10 models, and the rest made up of Getz and Accent models.

Courtesy: Global Insight Inc

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Posted by Naresh Koshti on 29 July, 2008 6:04:13 PM IST #