The Hindu Business Line : Hyundai set to hike Santro Xing price

HYUNDAI Motors India Ltd (HMIL) has announced plans to produce about 2.3 lakh cars this year, including 70,000 for the export market, even as it has decided to increase the price of its popular Santro Xing variants between 2.5 per cent and 4 per cent from early next month.

Stating that the recent increase in Accent price, citing increase in production costs including a rise in steel prices and other input costs, was something inevitable, the President of HMIL, Mr B.V.R. Subbu, said by May first week, the company plans to effect the price increase of Santro Xing variants. The costs could go up from Rs 7,500 to Rs 12,000.

The company, which launched Hyundai D segment notchback `Elantra' in Andhra Pradesh, said it would bring in new models. To better serve customers, it would expand its service network from 300 to 1,000 by the end of 2005.

Mr Subbu told newspersons that the company assembly line expansion is set to be completed later this year to scale up the capacity from 1,50,000 to 2,50,000. Apart from helping roll out of Getz by May, it would free up production capacity.

Referring to price increases, he said even though there has been some impact due to strengthening of the rupee, it is marginal considering the overall impact of increasing cost of production. During May 2003, Hyundai had raised the price of the car by about Rs 11,000. "In fact, if you look at the overall impact of steel price hike and other issues, the total costs should have gone up by about 6 per cent. But given the strengthening rupee and long-term steel supply contract, this has come down to about 4 per cent."

The company plans to sell about 8,000 Elantra variants - 1.8 litre petrol and 2.0 litre CRDi (common rail direct injection) versions - by freeing up the Sonata assembly line. The company expects to sell about 2,000 Sonatas this year.

When asked if the company was contemplating the launch of a CRDi variant of Santro Xing, Mr Subbu said the diesel versions in the segment Santro is offered barely account for about 20 per cent and there is no reason to consider that option. The sale of diesel variants of Maruti and Indica is particularly high in Andhra Pradesh.

The indigenisation level of Elantra, currently below 40 per cent, would be brought to about 50 per cent by next year. As against overall production of about 1,72,000 in fiscal 2003-04, the company plans to scale up output to about 2,30,000 cars this year.

When asked if the company would consider entry into the growing and yet crowded Sports Utility Vehicle segment of Rs 6-9 lakh range, where Chevrolet is set to launch Tavera, Mr Subbu said there are no plans yet to consider this option.