Exclusive: Hyundai India Scouts Third Manufacturing Location For Next Phase Of Growth

Hyundai Motor India has started exploring a third manufacturing location in the country as it prepares for an aggressive product expansion and sustained growth in a highly competitive market, people familiar with the discussions told Autocar Professional.

India is expected to be among Hyundai Motor Group’s fastest-growing markets over the coming decade. The carmaker will need additional capacity to participate in the expanding domestic market and increase exports, with around 30% of its India output expected to be allocated to overseas markets.

According to people familiar with the company’s volume plans, Hyundai is likely to fully utilise its manufacturing facilities in Tamil Nadu and Maharashtra by 2030. It has therefore begun assessing the next phase of capacity expansion to support products expected to bring incremental volumes.

Chhatrapati Sambhaji Nagar in Maharashtra and Sanand in Gujarat are among the locations under consideration. The discussions are at an early stage, and Hyundai has yet to decide on the site, initial capacity, investment schedule or product allocation.

The proposed project could attract an investment of more than $2 billion over time, over and above Hyundai Motor India’s ₹45,000 crore investment commitment through FY2030. The facility is likely to come up around 2030, with capacity being added in phases over five to seven years. At full scale, it could add around 500,000 units to Hyundai’s annual production capacity.

In an official response to Autocar Professional, Hyundai Motor India said: “We do not comment on market speculation or industry rumours. Should there be any material developments requiring disclosure, we will communicate them through the appropriate official and regulatory channels.”

The plan comes as Hyundai prepares for an aggressive product cycle in India. The carmaker has lined up 26 model launches through FY2030, covering new products, full model changes and updates. SUVs, hybrids and electric vehicles will play a larger role in the portfolio.

The proposed facility is expected to produce future mid-size SUVs, MPVs and electric vehicles for India and overseas markets, according to the people cited above.

Hyundai’s Talegaon plant is being expanded in stages and will supplement its long-standing manufacturing base at Sriperumbudur near Chennai. The two locations are expected to meet its requirements over the next few years, but the planned product expansion will require more capacity over the longer term.

The pressure on capacity is already beginning to show. Autocar Professional reported earlier that Hyundai had revised its production plan for calendar year 2026 from around 770,000 units to approximately 820,000 units, an increase of 50,000 units.

The increase is supported by demand for the Creta and Venue, festive sales, growth in rural markets and incremental volumes expected from two upcoming SUVs.

SUVs account for nearly 70% of Hyundai’s domestic sales. Rural markets contributed 25.9% of its sales in the first quarter of FY2027 and grew by 23% year on year.

Investment in the proposed facility is expected to be spread across phases. A part of its output is likely to be exported, expanding Hyundai’s use of India as a production base for overseas markets.

India is among Hyundai’s three largest markets globally. The choice of a third manufacturing location will depend on land availability, state incentives, access to suppliers, logistics and port connectivity.

Hyundai could also evaluate other locations before taking a final investment decision. The eventual scale and timing will depend on demand, utilisation of the Sriperumbudur and Talegaon facilities and the rollout of future products.