Heung Soo Lheem, MD & CEO, Hyundai Motor India
The managing director and CEO of Hyundai Motor India speaks to P Tharyan on the road ahead for his company in the face of stiff competition.
Has HMIL reached its full production capacity at the Irrungattukottai plant?
Our current capacity is 300,000 units per annum, the maximum we can go up to in our three-shift operation. We have foundry and machining shops and we also produce transmissions and engines at the plant. The combined capacity for both petrol and diesel engines is over 300,000 units per annum, both for domestic consumption and for exports to Korea and other countries.
What are your plans for the new plant in Chennai?
HMIL’s second plant will come up adjacent to the existing plant with a capacity of 300,000 units per annum. It will have enough capacity to cover all models and brands, from the small segment to premium cars. We will focus on the Santro twin model. Our head office has decided that the Indian operations will be a good export hub for small cars. This is also in line with the policies of the Indian government. We will use the Indian operations as a small car export hub. We have several manufacturing operations around the world — Korea, China, US, India and the Czech Republic. Each plant has unique identities. The new plant will also have an engine and transmission plant but we have yet to decide on the location. We are talking to the Tamil Nadu government on some incentive scheme.
The Getz does not qualify as a small car for excise relief. Do you plan to install a smaller engine?
That sounds very interesting but at this point there are no immediate plans to put in a smaller engine in the Getz. We have our own 1.2-litre engine and are doing a feasibility study on it.
Any plans for a diesel-engined Getz?
We will introduce a Sonata diesel engine model, maybe in the fourth quarter of this year. The Sonata Embera diesel has been widely accepted in our domestic market in Korea. We are keen to increase demand for premium segment cars. We have diesel versions for the Accent and also one for the new Verna model. We also have a 1.2-litre diesel engine suitable for the Getz.
What about exports of the Getz?
At present we are not exporting the Getz, which we produce only in right-hand drive (RHD) but are now working on exporting the Getz to neighbouring countries like Nepal and Bangladesh but volumes there are very limited. Yes, a left-hand-drive Getz model would have more volumes. The Santro and the Accent have both LHD as well as RHD models. With the current Getz model, we are not looking at developing a LHD model which will require huge investments.
When will the Verna be introduced and will the Accent be discontinued?
We hope to introduce the Verna — our best-selling car — soon, maybe around Diwali. There is absolutely no plan to discontinue the Accent. It will continue to be produced because we have got good support from both dealers and customers. Also, there’s considerable overseas demand for the car from countries like Algeria and Morocco. The Accent, with 10,000 units shipped, constitutes around 10 per cent of our total exports.
A new-look Santro has been spotted in Delhi. Is there a face-lift on the way?
One should always prepare for the future and develop new models. Every year Hyundai will introduce two new models, either a brand-new model or a face-lift of an existing model. In that sense we should introduce the twin model for the Santro in the Indian market. Also, it will be manufactured in India and not merely assembled here or brought into India through the CBU route.
From where do you source your diesel engines?
The CRDi engines are totally localised and we produce them at our plant in Chennai. Some of the components for this engine are supplied by Delphi and Bosch. Due to limited demand, the Sonata diesel engine will not be manufactured here. But we hope to manufacture it as we grow.
Is Hyundai planning a foray into the light commercial vehicle segment?
The Indian economy is growing very fast and also self-employed business entities are also growing. Based on our previous experience in other countries, huge demand will emerge for one-ton-payload trucks. In Korea, we have a model called the Porter for which we are currently carrying out a feasibility study in India. Price is a very crucial factor because the Tata Ace is a very good vehicle with a very good price. But our product is excellent and we export the vehicle to Singapore. When we introduce the Porter in India, we will have to manufacture it here and not merely assemble it.
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