The Hindu : Hyundai reaches another milestone

Online edition of India's National Newspaper
Friday, Dec 12, 2003

Business

Business

Hyundai reaches another milestone

By Our Special Correspondent

J. I. Kim, Managing Director, and B. V. R. Subbu, President, Hyundai Motor India, at the roll out of the 500,000th Hyundai car from the factory near Chennai on Thursday. — Photo: Shaju John

CHENNAI DEC. 11. Having seen the roll out of 5,00,000th car from its Irrungattukottai assembly plant here today, Hyundai Motor India Ltd. (HMIL) has set itself a target of reaching one million vehicle production by 2006.

The South Korean subsidiary hit the half-a-million figure within 60 months since it commenced sales in October 1998.

Addressing the national press at the factory premises here today, J. I. Kim, Managing Director of the company, said, "Our next phase of growth will be more aggressive and global in scale as we gear up to emerge as one of the largest exporters out of India for small cars and auto components". He presaged HMIL to reach the one million mark by 2006 and emerge as "a percentage contributor to Hyundai's worldwide operations".

The President of the company, B. V. R. Subbu, said HMIL was well on course to hit the export target of 30,000 vehicles this year. He indicated that by next year, HMIL would become the "largest manufacturer-exporter in India". He anticipated exports to up go around 25-30 per cent by 2006 from the current level of around 9-13 per cent.

Mr. Subbu said a combination of measures such as line extension, expansion and rationalisation had already been undertaken. It had also been decided to introduce third shift from January. These would suffice to ease production constraints. All these steps would see the vehicle production capacity go up to 2.5 lakh and that of engines to three lakhs. The President said these measures involved an investment outlay of around $220 million.

Quizzed on the reported plan of Toyota to enter the B segment where Santros, Zens, Indica and the like jostle for a share, Mr. Subbu said "it is in the realm of conjecture". Nevertheless, he insisted that, "We (HMIL) will be up to any challenge". "In his reckoning, manufacturing in India had given HMIL a significant cost advantage". While admitting that some of these could be negated by any adverse move on the tariff front, he was confident that the advantage of producing in India and the ability to provide product support would keep HMIL in good stead should there be any fresh challenge.

Questioned on how HMIL viewed the Tata move to come out with a `people's car', Mr. Subbu wondered if they could produce a car that was in sync with "globally current emission and safety norms" at that price proposition.

"If somebody can do it... it is a big if," he added.

Asked if HMIL was looking at a diesel Santro, Mr. Subbu said, "We have looked at that option. Kia Motors has a similar model with CRDi technology". However, it all depended on the price economics, he added.

Questioned on the steel price impact on the cost of vehicles, he sort of ruled out any imminent price hike. "March-April is the earliest we can think of any such move," he added.

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