August 1, 2012: Bo Shin Seo, Managing Director & CEO, Hyundai Motor India
Hyundai Motor India, India’s second largest carmaker and largest exporter, has been here for 15 years. The MD and CEO speaks to Shobha Mathur on a host of topics including products, its Tamil Nadu base and the need for a better infrastructure.
After over 15 years of operations in Chennai, how does Hyundai Motor India view its home base in Tamil Nadu? How can the state government boost further growth for HMIL?
Tamil Nadu is one of the most industrially advanced states and is known for good infrastructure, an educated and trained workforce, presence of several auto component companies and a stable industrial environment. This made us choose Tamil Nadu over other states for our manufacturing base. Many other companies followed suit and soon we witnessed rapid industrialisation. But this rapid pace of industrialisation also meant that the pressure on infrastructure became greater. The government is already taking corrective measures and strengthening infrastructure like ports, augmenting power and improving communications and connectivity. With a stronger infrastructure, we are sure that this will become an even more attractive investment destination. As far as Hyundai is concerned, we are certain that with the removal of some of the infrastructural roadblocks, we will be able to improve our production and delivery schedules.
Will Hyundai explore expansion outside of Tamil Nadu?
We have no plans for expanding production as we are comfortable with our existing production capacity.
What about plans of setting up a new plant and how much more can the production capacity be increased at the existing second plant at Chennai?
We currently function at 600,000 units per annum but with some adjustments of our production lines, this can go up to 670,000 units. This should help us service the market demand in the medium term. However, should the market dynamics change, then we will have to take a decision at that point of time. We are watching the market closely and as per our forecasts, there does not seem to be any need for additional investment in the upcoming years.
What is the progress made by Hyundai in setting up its diesel engine plant?
We are waiting for clarity on the fuel policy before we decide the way ahead.
When can we expect a diesel i10/Santro?
We have no plans to put diesel engines in these models.
Will Hyundai continue to cash in on the popularity of the current Santro and keep it as an alternative for people who want a bigger engine and a relatively more responsive car than the Eon?
The Santro is a very popular brand in India and we sell around 5,000 units every month. It is a different product from the Eon; it is different in styling, powertrain and platform. The Santro caters to customers who are very conservative and like the tall boy design.
Alternately, will Hyundai invest time and money on the Santro and get it ‘fluidicised’ in line with its philosophy of making all its cars ‘fluidic’?
No, we feel the Santro in its current avatar is more acceptable to certain customers who are very conservative and like the tall boy design.
Hyundai plans to launch the new Elantra later this year. What do you expect of this model?
The new Elantra is on a completely new platform and has been awarded the ‘North American Car of the Year’ and the ‘Car of the Year’ in South Africa. The C segment, where it will be positioned, is a challenging one. There have been no major launches since 2009 in it, hence things have been a little sluggish in this category. We are confident that the Elantra will refresh the segment and give it a boost.
Any plans to enter new segments like a compact MUV/SUV on the lines of the MarutiErtiga and Ford EcoSport models?
We are actively looking at an option of bringing in an MPV to India, as we had also showcased a concept MPV – ‘Hexa Space’ at the Auto Expo in January in Delhi.
What other new product launches are planned for this fiscal?
Earlier this year, we launched the Sonata and i-Gen i20. The Elantra is next.
What is the current status on the export front and how do you plan to grow your exports?
Our exports are doing well. Being the largest exporter, we have the flexibility to adjust our volumes between the domestic and the export markets. Of late we have witnessed good traction for the i10 in Latin America and for the Eon in Africa. The markets in these continents are doing well compared to Europe where economic issues continue to persist. Currently, we export the Eon, Santro, i10, i20 and Accent to nearly 120 countries. Our range covers almost the entire globe; there are hardly any new markets left to explore.
How is HMIL tackling the ongoing market slowdown and what do you estimate your growth to be during 2012-13?
It is difficult to give a forecast in such an environment. We should be able to achieve the same growth as the market and protect our market share.
What initiatives is Hyundai taking towards manpower development?
We have elaborate training programmes for the technicians from the induction time onwards. The training covers all aspects of work including safety, tools, quality, customer expectations as well as quality issues. As a part of skill up, the technicians are sent to Korea during the new car developments to familiarise them with new model requirements so that they can produce zero-defect cars from day one itself.Besides, we have regular training programmes to ensure healthy living and for managing finance that helps workers to think positively. All the employees undergo these trainings as part of skill and personality improvements.To encourage participation and involvement, we are running a campaign called ‘ACT 302, meaning Achieve Challenging Targets, 30 percentimprovements in two years.’ This is a bottom-up voluntary programme where the employees participate in improvements in safety, productivity, quality, cost, and ergonomics or in improving the relationships among themselves. Through this initiative, we have completed more than 5,000 projects resulting in cost savings to the tune of Rs 30 crore and in addition, improvements in quality, elimination of accidents and downtime reduction.
What is Hyundai’s R&D centre at Hyderabad currently working on?
Our Hyderabad R&D centre is currently providing global support in the field of CAE (computer aided engineering). Design support is also provided for the Hyundai Motor Corporation R&D centre. The centre also provides technical assistance to our manufacturing plant in terms of problem solving and for new projects.
How does Hyundai view the recent announcement of SIAM launching a voluntary code on vehicle recall?
Hyundai is an active member of SIAM. We welcome this announcement. As a responsible auto manufacturer, the voluntary code on vehicle recall has been followed by Hyundai as a global policy. In India, for making it a mandatory code, the government needs to form a regulatory body.
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