Govt exhorts Hyundai to set up 3rd plant in India

The Dollar Business Bureau

Government has urged Hyundai Motor India Ltd (HMIL), the second largest car maker in India, to set up its third manufacturing unit in the country without hesitation as measures are being taken to enhance business environment and drive manufacturing activities.

Nirmala Sitharaman, Minister of Commerce and Industry said it depends on the company to choose the location for the plant.

“I do not think there are enough reasons for you (Hyundai) to think more about it. It's time that you set it up and this is a good time for Hyundai to announce this,” Sitharaman said while speaking at an event on 'Korea-India Industry and Infrastructure Forum' on Friday.

The government is actively taking measures to boost the business environment in the country, she added.

Early this year, Young Key Koo, Managing Director and CEO, HMIL, had stated that Hyundai was not looking to establish a new manufacturing unit at the moment as the company already had adequate capacity for the coming three years, which could further be increased to 7.2 lakh units per year from the current 6.8 lakh units.

However, in August 2015, Rakesh Srivastava, company’s Senior Vice-President Marketing and Sales had indicated that the company required to get clarity on vital issues such as Goods & Services Tax (GST) and land acquisition before deciding on a third plant.

The South Korean auto major currently has two manufacturing plants situated at Sriperumbudur near Chennai in Tamil Nadu. In addition to the manufacturing plant, it has a second unit in Chennai that manufactures engines.

At present, in India, Hyundai sells 10 models of car across segments including Creta, Elantra, Eon, i10, Grand i10, Active i20, Elite i20, Verna, Santa Fe, and Xcent.

From its Chennai plant the company, exports vehicles to almost 92 countries across Africa, Asia Pacific, Australia, Middle East and Latin America.

Joo Hyunghwan, Minister for Trade, Industry & Energy, South Korea, who is in India for discussions on reviewing India-Korea FTA, also attended the function.