2013 South India Special - B S Seo, managing director, Hyundai Motor India
Hyundai Motor India’s managing director on the next-generation i10, flexi-engine production, the company's staff training programme and on reducing energy consumption in the Chennai plant. An email interview by Shobha Mathur.
What is Hyundai’s gameplan as regards the rollout of the next-gen i10 (codenamed BA)?
We will introduce our new car BA during the upcoming festival season. It will be positioned between our best- selling cars – the i10 and i20 – to strengthen and widen our compact segment portfolio.
What will the localisation level be for the new hatchback?
Hyundai has been able to keep costs competitive due to a high degree of indigenisation across the products. Our attempt is to increase localisation in every model.
How does HMIL plan to flexi produce petrol and diesel engines in the new engine plant being set up at Sriperumbudur?
In the past, we have witnessed fluctuations in fuel prices. Therefore, to be competitive, it is recommended to have a flexible engine production, to meet our customer demand. The Chennai plant’s product mix will be dictated by the market demands prevalent from time to time.
Which models currently contribute to HMIL's growth and how is it affected by the depreciating rupee?
In June 2013, HMIL posted 0.3 percent growth in the domestic market and 4.6 percent growth in exports. Our domestic models in the compact segment grew at 10.8 percent in the first half of 2013. Our best-selling models – i20 and Verna – posted a promising growth of 26.0 percent and 13.5 percent respectively while the new Elantra stood out as a leader in that segment. While exports are an integral part of our business strategy, we are always focused on the domestic market. The depreciating rupee will have an adverse impact on the input costs and fuel prices, which may lead to a further drop in already stagnating demand and margins will be further squeezed. However, exports bring in much better realisations which helps us ring-fence the risk a depreciating rupee presents.Despite the slowdown in the Indian economy HMIL’s market share has been increasing YoY and is presently at 21.5 percent (June 2013) while the automobile industry has de-grown by -8.6 percent (June 2013). We have been able to achieve this by keeping our pulse on the market and refreshing our products to suit the evolving customer. We refurbished the i10 and i20; positioned the Eon as the trendsetter in its segment, introduced the new Elantra and established the Verna as a segment leader. This helped us provide higher value and better offerings to our customers. Our strategy to maintain our market share will be to launch new products in volume segments and continuously improve the price-value equations by refreshing all our existing models.
Is Hyundai looking to bring a compact SUV into the Indian market?
We are studying the different segments closely and will launch products as per customer requirements.
Does Hyundai have a captive training programme for skilling workers and how does it meet the need for skilled technicians?
HMIL has an in-house Technical Training Centre (TTC) armed with a robust programme to suit the requirements of the shopfloor and meet the career ambitions of a fresher. The candidate undergoes the course which is a combination of theory and practical lessons, with technical sessions being augmented by sessions on shopfloor safety and personality development before deployment. The next level is On the Job Training (OJT) which involves hands-on training at a particular workstation for at least three weeks, where the trainers continuously interact and monitor the performance to ensure quality. The monitoring process will continue until the completion of their term based on 4M principles (Men, Method, Machine, Material). Apprentices are encouraged to put in their best efforts since their performance during their apprenticeship will reflect on their future growth.
What are the hurdles faced in terms of exports and existing port facilities?
HMIL exports around 250,000 cars to over 120 countries from Chennai Port. As of now, the Port meets our requirements. We believe that we will continue to maintain our leadership position in exports for some time to come.
How does Hyundai plan to improve its overall vehicle dependability scores as per the 2013 JD Power VDS study?
Hyundai has unleashed a lot of measures over the years to significantly improve its design and quality which has reaped benefits. We will continue to focus on our quality drive. We will also constantly work with our partners and vendors to enhance the quality and durability of the parts to provide our customers with desirable quality.In terms of service and mechanical parts, Autocar India’s ‘Mega Spare Parts Price Survey’ (August 2013 issue) clearly shows that Hyundai products are 30-20 percent cheaper than other competitors in the markets.
How is the power situation in Tamil Nadu and does it affect production schedules?
The power situation in Tamil Nadu has stabilised to a large extent. The state government has announced a slew of measures to mitigate the problem. Our production is on schedule so far as we have been able to work closely with vendors and find solutions jointly. Additionally, we are working on reducing power consumption, year on year. We have been able to achieve this by introducing a combination of preventive measures, utilising high efficiency motors and designing factory buildings to increase the use of natural light and through improvising our processes. Our target each year is to reduce consumption by 3-4 percent and so far we have been able to achieve the targets. We are also exploring renewable energy options like solar power.
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