2012 Hyundai ix35 Fuel Cell Paris Motor Show

Hyundai India has announced that it would invest USD 300 million (Rs. 1600 crore) for expansion in the Indian market. On 5th of November, 2012, the Korean automaker would sign a Memorandum of Understanding with the Government of Tamil Nadu. The amount being invested would go into setting up of a flexible engine plant and a new press shop at the existing facility at Sriperumbudur in Chennai. This new development comes along with the company’s focus on introducing new models.

The new engine plant will meet the demand for diesel motors. Currently, the company markets eight passenger cars across four segments. Under the A2 segment, it sells the Eon, Santro, i10 and the i20. The A3 segment comprises of the Accent and the Verna whereas Hyundai’s Elantra comes under the A4 segment. Sonata is sold under the A5 segment. Hyundai also sells an SUV named Santa Fe. With so many models and variants under the umbrella, newer models in the pipeline and increasing demand for the diesel models, a new engine plant comes as a default requirement.

The investment will also lead to employment generation for 500 people which excludes the indirect employment opportunities that it would create. India serves as a major export hub for the company. Hyundai India exports to more than 120 countries in the world. With the introduction of the new plant, the company expects to boost its exports as well. The expansion plans of the company are supported by the 355 dealerships and 800 service joints across the country. The company already owns a research and development facility in Hyderabad and their aim is to transform it into a center of excellence in automobile engineering.

The new diesel engine plant will lead to more aggressive pricing of diesel Hyundai cars. Currently Hyundai imports diesel engines from Korea, which leads to its diesel cars being priced higher than competition. We can expect Hyundai to produce 1.1-litre, 1.4-litre and 1.6-litre diesel engines at this upcoming engine facility. Hyundai is also investing in new product development and we sense utility vehicles are now on the company’s radar.