Hyundai Revs Up
Production in India

New plant in Chennai will double production capacity on the subcontinent


Hyundai Motor Co. completed the construction of its second auto production plant in Chennai, India, and held a ceremony on Feb. 2 led by Chairman Chung Mong-koo and officials of Tamil Nadu State.
The brand new auto plant built on some 177,000 square meters of land at a cost of about $1 billion is capable of producing 300,000 units of sedans annually. Hyundai Motor, the world's fifth-largest automaker, now has the capacity to build 600,000 cars in India, the company said.
Chairman Chung, at the ceremony, said Hyundai Motor now has the production capacity to compete with major car makers in India and the company will make its Indian operation an advanced post for small-car markets around the world.
The company launched the construction of the new car plant in November 2005 and by December 2006 completed the installation of car production facilities, taking about a year for test-operations of the facilities.
The company decided to exclusively turn out the 'i-10'mini-sedans from the new plant in order to maintain its position on the subcontinent as the No. 2 car maker with its annual sales of the Santro, Gets and i-10 mini-sedans reaching over 200,000 units.
The rapid increase in the sales of Hyundai Motor cars in India is due to the explosive expansion of the country's car market, the company said.
The number of cars sold in India last year reached 1.26 million units and is projected to rise to 1.5 million units this year, an increase of 18 percent, well above the projected global increase of car sales of only 3.7 percent this year. Hyundai Motor's president in charge of marketing, Choi Jae-kook, said the Indian car market is not that big now, but it has a lot of room to expand once the general public has the wherewithal to buy cars.
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To take the next leap forward and stay competitive in this tough marketplace, it's important to secure a firm base for global production, but of equal importance, we must maximize our sales and marketing efforts in order to get closer to our customers, to grow the brand and improve profitability,"said Chairman Chung.
This year is a very significant year for the Hyundai-Kia Automotive Group as expansion projects are being completed in China and India and construction work is in full swing on new plants in the United States and the Czech Republic. Around mid-year, Hyundai is scheduled to break ground for a plant in Russia.
Investment in transplants has been a key tool in Hyundai management's efforts to globalize operations and reduce its dependency on the Korean market. Transplants accounted for 35 percent of Hyundai's unit output in 2007. This is set to grow to 42 percent in 2008 as Beijing Hyundai and Hyundai Motor India complete their expansion projects this year.
As Hyundai's efforts to upgrade quality have entered the stabilization phase, the next step is to reinforce marketing in order to lift sales, maximize profits and enhance the value of the brand.
The company's 2008 global sales will reach 3.11 million units, equivalent to a 19.6 percent increase over 2007's unit sales. On a turnover basis, the company is targeting a 12.2 percent y-o-y rise in sales to 46 trillion won (about US$50 billion based on 920 won per USD exchange rate). On a group-wide basis, the turnover target for 2008 has been set at 118 trillion won (14.6 percent increase y-o-y).
Domestic sales are forecast to rise by 8 percent to 670,000 units while exports will grow by about 4.6 percent to 1.13 million units. Transplants in India, China, Turkey and the United States will see their sales jump by 46 percent to 1.31 million units.
2007 Results
Hyundai saw its worldwide sales in 2007 grow by 4.1 percent to 2,602,322 units. The biggest percentage gain was seen in the Korean market where Hyundai's sales were up by 7.6 percent to 625,275 units.
Sales by transplants edged up by just 1.6 percent to 900,311 units while expor. nw

Chairman Chung Mong-koo of Hyundai Motor Co., his executives and Indian workers for the auto company's new and second auto plant in Chennai, India, celebrate the dedication of the new auto plant on Feb. 2.


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