Hyundai to make India its global small car hub, eyes No.1 spot

According to HMIL managing director and CEO Heung Soo Lheem, parent company South Korea's Hyundai Motor Co. has decided to make all its small cars in India and make it the company's global small car hub.

"Our mother company has decided that all small cars will be produced from in India in future and so all research and development (R&D) for small car will happen here," Lheem said.

"We are serious about the micro-car market and from April this year we have undertaken a massive feasibility study to understand the Indian customers' mind - driving conditions, styling cues and technical specs - for the proposed small car," he said.

According to Lheem, the small car would not compete with Tata Motors' Nano, which is being touted as the world' cheapest car with a showroom price tag of $2500. "Our small car will be price-competitive and exclusively target the Indian market, but may be followed by a global launch later," he said.

In this regard, Lheem said, design and technical analysis work on the small car project has already commenced at its R&D center in Hyderabad. The R&D team, he said, would be ramped up from the present 250 to 800 by 2009 and would coordinate with Hyundai's global R&D headquarters at Ulsan in Korea.

The final product, Lheem said, would be launched by 2010 and would meet the demand of India and other emerging markets. "We will gauge the response to Nano and will develop the product accordingly to set the next aspiration level," he said.

The company, Lheem said, is also planning to ramp up its export from India.

"In the first half, about 42 percent of our produce were exported to over 95 countries. But with the slowdown in the domestic industry, it is likely to increase up to 50 percent for the second half," Lheem said, adding that HMIL would produce 5.3 lakh units this year, of which about 2.7 lakh units would be exported. HMIL currently exports Santro, Getz, i10 and Accent across the world. It, however, would replace export of Getz with i20, after the introduction of the car in the market.

"From the next year, we will increase our production capacity to 6.3 lakh cars including 20,000 CKD (completely knocked down) units, by starting the third shift," he said. The CKDs would be exported to emerging markets in Europe and Asia, he added.