H S Lheem, Managing Director, Hyundai Motor India
Hyundai Motor India is the country's largest passenger car exporter and has made India the global hub of its small car production. We spoke to its managing director to find out the company's export plans for the current year and how it plans to tackle the current downturn in the global automotive market.
What is HMIL’s export strategy from the Indian perspective?
Our exports have come under tremendous pressure due to the global meltdown. Currently, we are exporting about 50 percent of our total production but if the current downturn continues our exports might come under considerable pressure and may even fall by as much as 25 percent in 2009.
What are the inherent advantages that India offers in terms of small car production?'
India is a very large market for compact cars and within the Hyundai family India has been designated as a production hub for all its compact cars like the Santro, i10 and i20. This has huge significance for the Indian operations and the rationale behind doing this is that India, being a big market for compact cars, enables us to produce large volumes which generate economies of scale in terms of production. This also helps us to price the cars competitively.
What are the major obstacles to increased exports from India?
The major obstacles to increased exports from India are poor infrastructure in terms of roads and ports. It takes us hours to reach our cars from the Sriperumbudur factory to the port as trucks can go only within certain time limits, which creates a bottleneck.
How do your made-in-India cars compare to those made in Korea or other plants?
In terms of quality and the manufacturing process, they are identical to cars which we make elsewhere in the world. We use the same materials and process and we do not differentiate in terms of quality. So the Indian customer gets the same quality as our overseas customers, only the trim levels vary.
How are the i10 and the Santro doing in the export markets?
The i10 has done very well in the overseas market and within 10 months of its launch sold over 100,000 units. The European market is developing a preference for smaller cars and the i10 will possibly do even better once the economic situation improves. In Europe, the i10 has generated a very big demand and in this market it has replaced the Atos Prime or what we know in the Indian market as the Santro.
How do you view the current demand situation in India?
We feel that demand will remain low for at least the first half of 2009 and the overseas market too would be depressed.
How can the government help to boost exports?
The government can do many things to help. It should improve the infrastructure and introduce a system of incentives for large scale exporters, like Hyundai, that are performing well.
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