Hyundai Motor to set up second plant near Chennai

Hyundai Motor to set up second plant near Chennai

HYUNDAI Motor Company has said it will build a second car plant in India. The plant will come up at Irungattukottai, near here, where the company's wholly owned subsidiary's plant is located.

With this plant, Hyundai Motor India's capacity will go up to 4,00,000 units a year from the present 2,50,000 units.

In an announcement in Korea, which has been reported by news agencies, Hyundai Motor Company has said that the second plant will go on stream in 2007.

At present, Hyundai Motor India Ltd, a subsidiary of the Korean company, manufactures the Santro, Accent, Elantra, Sonata and the recently-launched Getz at this plant. It also sells the Terracan sports utility vehicle in the country.

The company has not indicated the likely investment in the new plant. It is expected that the new plant will be funded by the parent and through internal accruals from the Indian subsidiary.

The announcement coincides with the visit of Mr Chung Mong Koo, Hyundai Motor Company's Chairman, to Hyundai Motor India's plant on Wednesday. The company wants to tap the growing Indian market.

The Korean company had announced its decision to make the Indian plant the hub for making small cars, including cars for the export market. Hyundai Motor India exports the Santro (badged as the Atos) to Europe and Mexico, apart from other markets.

Hyundai Motor India had expanded its capacity from 1,50,000 units to 2,50,000 in the second half of 2004 at an investment of about $250 million. For the calendar year 2004, it sold 2,15,630 cars, which is a 43 per cent jump over the previous year's sales.

With the parent now committing further investment in the Indian company, it is expected that Hyundai Motor India will also look at making CRDi (Common Rail Direct Injection) diesel engines too, apart from the petrol engines that it makes for its cars here. At present, it sources the CRDi engines from its parent.

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