Hyundai Makes India its Biggest Foreign Manufacturing Site

Feb. 5, 2008

New plant doubles Hyundai's capacity in India to 600,000.

Hyundai Motor Co. opened a second plant in India on Feb. 3, making the country its biggest foreign manufacturing site. The new plantwhich is 30 miles from the southern city of Chennai, will double Hyundai's manufacturing capacity in the South Asian nation to 600,000 units a year, company officials said. Hyundai expects to produce 530,000 cars this year, up from 300,000 last year, about half of which will be exported. "Our new plant will be the platform of future growth," Hyundai Motor chief executive Mong-Koo Chung said at the opening of the plant.

India overtook the U. S. as Hyundai's biggest production base outside South Korea with the second plant. Construction of the plant, which will employ 7,500 people, began in November 2005. "Hyundai Motor India will be our global manufacturing hub for all of our small car models," Chung said. He added that the company also plans to open a research and development facility in the southern Indian city of Hyderabad.

Hyundai is the second-largest car maker in India, behind only Japan's Suzuki Motor, and is the country's largest car exporter. The company expects to export Indian-made cars to 90 countries in 2008, up from 73 in 2007. The company has set aside one billion dollars for investment in the new facility.

Car sales are expanding rapidly in the nation of 1.1 billion people, where the Tata group in January unveiled the world's cheapest car, the Nano, that will cost $2,500. About 1.4 million automobiles were sold last year. "We are not looking at competing with the Nano on price point," said Ashok Jha, president of Hyundai Motor India. "But we will keep our options open."

Car sales in the country are projected to grow 15% annually until 2016, when the market will be worth $145 billion, said R.C. Panda, the top civil servant in the federal ministry for heavy industries.