Tariff barriers to suit Hyundai’s India plans

CHENNAI: Increased protectionism around the world has turned into a blessing in disguise for capacity-starved Hyundai Motor India as it gets ready to launch new mass-market products.Due to increased tariff for fully built vehicles in export markets like Vietnam, the Philippines, Ecuador and Algeria, Hyundai is planning to export more of its cars in the knocked-down form. The exercise is likely to release a capacity of 50,000 units a year for Hyundai before it launches small car AH2 — which may be named after its most successful product in India, the Santro — and a compact SUV launch to take on Maruti’s Vitara Brezza.The company is expecting that this along with efficiency and automation improvement will add almost 1 lakh units to its capacity. This should help it ensure adequate supply for the domestic market ahead of big volume launches.Hyundai Motor India has been operating at more than 98% capacity for the best part of the last 4-5 years.Young Key Koo, MD of Hyundai Motor India, told ETthat the current capacity at its plant in Chennai was adequate for it to meet domestic demand till 2020. Any plans for new plant will only be discussed post 2020.“We are very aggressive with the sub-4 metre vehicle segment in India as it accounts for a large part of the Indian market. The coming product launches have potential to add a monthly volume of 10,000-15,000 units in the coming year and hence we are making necessary arrangement to cater to the increased demand,” Koo said.65209233 Hyundai Motor India used to export 45-50% of its total production five years back. That came down to 25% at the end of 2017. It is likely to come down to 15% in the coming years, as it makes way for more domestic volumes.Between now and 2020, Hyundai will be launching eight products including two all-new vehicles and an electric SUV. These will entail an investment of close to $1 billion. Hyundai recently spent significant time and resources to upgrade the existing manufacturing set up with increasing automation and upskilling employees, vendors and dealers.

from The Economic Times https://ift.tt/2LGFKnE