From Korea, with love: Hyundai now wants to be a homegrown Indian company
Hyundai Motor India is embarking on a transformative journey, signaling its deep commitment to the Indian market and a strategic shift towards becoming a more localized and integrated entity. This evolution comes as the company celebrates nearly three decades of success in India, during which it has become the second-largest car manufacturer in the country. With ambitious investment plans, a focus on local manufacturing, and a vision to cater specifically to the needs and preferences of Indian consumers, Hyundai is solidifying its position as a key player in the Indian automotive landscape.
A significant indicator of this commitment is Hyundai Motor India Limited's (HMIL) plan to invest ₹45,000 crore (approximately $5.4 billion USD) by FY2030. This substantial investment will be directed towards various strategic initiatives, including product development, research and development (R&D), capacity expansion, and technological upgrades. A substantial portion of this investment, around 60%, will be dedicated to product and R&D, with the remaining 40% allocated to capacity expansion and upgrades. This financial commitment underscores Hyundai's long-term vision for India and its confidence in the market's growth potential.
Hyundai's localization strategy is multifaceted, encompassing product design, manufacturing, and supply chain integration. The company aims to develop vehicles specifically tailored to the unique demands of the Indian market, considering factors such as road conditions, climate, and consumer preferences. A prime example of this is the Hyundai Exter, an entry-level SUV designed for the Indian market that won the 2024 Indian Car of the Year (ICOTY) award. Furthermore, Hyundai plans to launch India's first locally manufactured dedicated electric SUV by 2027, marking a significant step towards sustainable mobility and aligning with the Indian government's push for electric vehicle adoption. HMIL is also localizing the battery packs for its electric vehicles in Tamil Nadu.
In line with its localization efforts, Hyundai is also strengthening its manufacturing footprint in India. The company has two manufacturing plants near Chennai, Tamil Nadu, with a combined production capacity of 850,000 vehicles per annum. Furthermore, Hyundai acquired a manufacturing facility in Talegaon, Maharashtra, from General Motors in 2023. HMIL is investing significantly to modernize and expand the Talegaon plant, with plans to increase its capacity to 250,000 units by 2028. The Talegaon plant will serve as a global export hub for the second-generation Venue, with HMIL planning to export to 30 countries.
Hyundai is strategically focusing on the SUV segment, which is experiencing rapid growth in India. The company aims for SUVs to constitute over 80% of its portfolio by FY2030. In addition to SUVs, Hyundai is also exploring opportunities in other emerging segments, such as Multi-Purpose Vehicles (MPVs) and off-road SUVs. Furthermore, Hyundai plans to introduce its luxury brand, Genesis, in the Indian market by 2027, catering to the growing demand for premium vehicles.
Hyundai's commitment to the Indian market extends beyond manufacturing and product development. The company is also focused on expanding its sales and service network, particularly in rural areas, to reach a wider customer base. HMIL aims to cover 85% of India's districts with its network, with rural markets expected to contribute 30% of total sales by FY2030. Furthermore, HMIL has a research and development (R&D) center in Hyderabad, Telangana, which contributes to the development of new models and technologies for the Indian market.
Hyundai's efforts to become a homegrown Indian company reflect a strategic approach to capitalize on the immense potential of the Indian automotive market. By localizing its operations, tailoring its products to Indian consumers, and investing in manufacturing and R&D, Hyundai is positioning itself for long-term success in India. As India continues to emerge as a global automotive hub, Hyundai's commitment to the "Make in India" initiative and its focus on sustainable mobility will further solidify its position as a trusted and valued brand in the country.
