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Hyundai to shift part of i20 production to Europe

CHENNAI: Hyundai Motor India has decided to have one more production base for its i20 cars. The new manufacturing base will be outside India. In the light of the changing environment, the company management sees a lot of economic sense in serving the i20 needs of Europe from a production location closer to the market. The company is still to finalise the second location. It has a few production bases in Europe.

In the first week of November last, the first consignment of the all-new i20, which was revealed at the Paris Motor Show in October last, rolled out from HMIL’s Sriperumpudur plant for shipment to the European market. The first consignment of ‘Made in India’ i20 cars comprised 2,820 units. According to company officials, around 17,000 i20 cars were exported to Europe in the first quarter of 2009. The plan was to export 1.20 lakh units in 2009.

When it launched the production of i20, the company had said that the entire i20 needs of the European market would be met through production at the Sriperumpudur facility.

The change in thinking has come about due to a combination of factors ranging from volatility of the rupee, poor power availability, inadequate export incentive and labour problem. All these had made export of i20s from India a costlier exercise, sources said.

HMIL sources clarified that the Sriperumpudur facility would continue to make i20s for the domestic market. The company, sources said, was hoping to sell at least 45,000 units of i20s in the domestic market in 2009.

Company officials, however, asserted that India would continue to be the base for small car production. They pointed out that i20s were designed specifically for the European needs in terms of style and other things.

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