Hyundai plans a third car plant in India, boosted by Modi’s Seoul visit

Hyundai Motor Co, currently the second-largest car maker in India, is weighing plans for a third auto plant in India, after Prime Minister Narendra Modi visit to South Korea where he called for greater foreign investment to encourage local production.

Chairman Chung Mong Koo, who met with the Indian prime minister today to exchange ideas on Korea-India's auto industry's cooperation and mutual development, said the company will consider setting up a new plant in India. He did not elaborate.

Maruti Suzuki India Ltd is also building a new factory while Ford Motor Co opened a new assembly and engine plant in March and Honda Motor Co is expanding one of its plants.

The South Korean carmaker said it plans to introduce new models, including a sport utility vehicle, and boost output at its two existing plants this year.

''While Chennai plant is a symbol of Korea-India's economic cooperation, I hope to further expand it in areas such as construction and railway to aid in Korea and India's mutual economic development,'' Chung said in his meeting with Modi, according to Hyundai.

Hyundai said India's auto industry's annual sales have increased 3.2 per cent under the Modi administration and this year it is projected to be 2.74 million units, a 7.8 per cent increase from last year.

''Hyundai Motor's Chennai plant is a symbol of Korea-India economic cooperation and I thank the Indian government for its support in Hyundai Motor's growth in the Indian Market,'' Chung said.

Hyundai Motor, in its first year in the market, ranked second among the car brands in India. It continued to launch strategic models specifically targeting India and now leads the market by selling 400,000 vehicles annually.

Hyundai is targeting to sell 465,000 vehicles in India this year, up 13 per cent from a year earlier, the company said.

The Indian plant can currently produce up to 650,000 units operating on three shifts and improving the UPH (unit per hour) within its two plants.

Hyundai Motor Group started its railway business in India with Hyundai Rotem securing its first order in 2001. By securing subsequent orders such as Bangalore and Hyderabad metro deals, Hyundai Motor Group has the largest market share in India's EMU market.

In the construction business alone, Hyundai Motor Group has successfully secured business in bridges, harbours, and power plants. Hyundai Motor Group is aiming to expand its business as the Indian government is actively investing in infrastructure projects.

In the auto component business, Hyundai Motor is helping its business partners in its expansion into the Indian market. Currently, 71 component suppliers including 42 tier one suppliers have expanded into the Indian market along with the Hyundai Motor and continuing its growth in the market.

As the auto industry output continues to increase Hyundai Motor will support its component suppliers to attain business with other global auto companies in India, the company added.