Hyundai is currently on the scouting for land in Rajasthan and is in talks with state officials for the second plant that will help expand its total production capacity.
The country’s second largest automaker, Hyundai India has been on a role churning out successful products back-to-back in recent years. The automaker has also been the largest automotive exporter in the country with its Chennai based facility providing the necessary production capacity till now. However, with expansion plans in place and new models scheduled for launch in the coming years, the South Korean manufacturer is looking to open its second facility in the country and is currently in talks with the state of Rajasthan for land.
Operating from a single facility near Chennai, Hyundai has been facing production constraints in a bid to keep up with the demand. The automaker also stopped the production of its oldest model Santro in order to make space for newer offerings. As per sources close to the development, the company is currently in talks with the Bureau of Investment Promotion (BIP) Rajasthan, a governing body that plays a major role in providing services that are focussed on investments of Rs. 10 crore and above. Reportedly, the automaker was also scouting land in Gujarat before moving on to Rajasthan.
Once the decision on the new facility has been taken, it is believed that the new plant will be operational within 18-24 months. The production capacity though is not known as yet. In the meantime, Hyundai has restructured its manufacturing operations at the Chennai facility to accommodate the additional domestic demand. The automaker has also shifted the production of some its export models to other facilities in Czech Republic and Turkey to take off the load from its Chennai facility.
Hyundai’s move to expand in the north comes out of the need for reduction in transit time and faster deliveries. The automaker’s annual capacity stands at 6.80 lakh units from the Chennai facility, with 91 percent of the capacity utilised. The company is also working to launch products in newer segments and has the ix25 compact SUV and the Elite i20 Cross lined up for launch, while an MPV is also on the cards. The new facility will aid Hyundai to expand its domestic market share from the current 21 percent without having to compromise on exports as the Indian market promises exponential growth in the long term.
After Tamil Nadu and Gujarat, it is now Rajasthan that is turning out to be a major hub for auto manufacturers. Most recently Honda launched its facility in Tapukara along with Hero MotoCorp in Neemrana. JCB India too opened two new facilities near Jaipur, in addition to the facilities opened by Ashok Leyland, Eicher-Polaris and TAFE tractors.
Source – Autocar