Mumbai: India is set to the first market, outside Korea, for Hyundai to get listed. Set to debut on the bourses, the Korean major has drawn a plan to invest INR 32,000 crore in the country over the next 8-10 years. “We believe now is the right time for us to take that step forward and further indianise our operations. So we want to become a true, most trusted brand in India,” says Tarun Garg, COO, Hyundai Motor India.To get a better share of the Indian pie, products more tuned to India, if not developed in India, would be crucial. And, for that a robust local engineering and R&D operations is indispensable. ETAuto learns that Hyundai is looking at ramping up its earlier announced INR 1,400 crore investment for an advanced test track in Telangana, by another INR 600 crore.
An additional INR 200 crore could be invested to beef up the Hyundai R&D centre in the state capital Hyderabad. Hyundai Motor India wouldn’t comment on details of the plan. Its CFO and ED Wangdo Hur says, “We’ll enhance R&D capabilities for the future”.
On a broader level, we will see more aggressive products, R&D capabilities, and, of course, even more advanced technologies,” says Garg.
Hyundai will be doing something similar to what Maruti Suzuki India did a a few years ago. The Japanese major set up a major INR 3,800 crore R&D and engineering hub in Rohtak, Haryana.
Raising the bets, big EV market ambition
After 26 years in the Indian market, where it started the journey with the tallboy hatchback Santro, Hyundai is increasing the bets on its third largest (after USA, Korea) market. It has expanded production capacity of its cars in India by 30%, with the acquisition of the 250,000 units per annum plant in Talegaon, near Pune. This also gives a logistical advantage to tap both domestic, and export markets better.
The second largest passenger vehicle maker in the domestic market, Hyundai has an ambition of being a leader in the emerging electric vehicle (EV) market. “So we want to really be a kind of a leader there,” says Garg, while also adding that “we should be able to target a good market share in the EV segment, and continue to bring some very, very exciting products to the Indian customers, like we have done in the IC space all these 26 years of operations in India.”.
Hyundai, which currently has only one EV, the INR 46 lakh Ioniq 5,plans to start the affordable volume EV journey with the electrified version of its best-seller Creta SUV. The OEM is betting on a high localisation strategy to compete well in the space currently dominated by Tata Motors. Garg says battery packs, including cells, have already been localised in Tamil Nadu,
Power electronics, and drivetrain are being planned for localisation next. “Along with our localisation, we are doing value engineering, value analysis, and cost innovation. Through such steps we want to have good margins, so that we can fund our future capex through internal accruals,” says Hur.
The Korean major HQ earns 3.5% royalty on its vehicle sales in India. A growing economy with a projected 7% GDP growth this year, a median age of less than 30 years, car penetration level of around 34 per 1000 people, India has all that Hyundai needs to tap for a good growth journey. And so is it for a host of other OEMs, all of whom also want a bigger pie of the Indian market pie. A more promising journey, but also a more competitive one ahead for all in India.
And, in the journey ahead, Hyundai is likely to tap the growing apisaration levels of Indian customers through cars under its premium brand Genesis. “In the long term, we will definitely evaluate the Genesis brand for India as well,” says Garg.
