The Hindu Business Line : Hyundai shelves launch of Carens

The company's President, Mr B.V.R. Subbu, told Business Line that Carens did not fit its plans. "Based on the customer feedback, we decided not to launch the product now," Mr Subbu said.

Carens had earlier run into problems with the Foreign Investment Promotion Board (FIPB). The board had sought a clarification from Hyundai on the grounds that Carens was in fact a Kia Motors product. The company follows cross-badging of vehicles among its associate companies globally.

Its query, according to auto analysts, was curious because the board had earlier allowed certain cars from associate companies of manufacturers based in India. As per the application with FIPB, Hyundai wanted to import the five-door fuel-injected 1.8-litre Carens as a completely built unit (CBU). One of the major successes of Kia Motors, Carens is one of the models credited with turning around the fortunes of the loss-making company.

The multi-purpose vehicle market in India is around 83,000 that are likely to cross the one-lakh mark during the current fiscal. The segment is expected to grow 15-20 per cent annually during the next five years.

Though the plans for the launch of Carens have been shelved, Hyundai has a busy year ahead. Apart from launching Elantra a few weeks ago, it is all set to launch Getz and then a mini-SUV Tuscon in a few months.

The company plans to expand its capacity to 2.5 lakh from the existing 1.5 lakh and also increase its exports. It has invested most of the earmarked $220 million for expanding its capacity. It has already invested around $614 million.

During 2003-04, Hyundai's sales jumped 53 per cent to around 1.71 lakh units with the sales of its B segment car Santro crossing the one-lakh mark, the highest in its category in a single year. Since its launch, Hyundai has sold a total of 2.5 lakh cars while its other models, Accent has sold 40,000 and Sonata 2000. Its sports utility vehicle, Terracan was launched recently.

Hyundai's exports grew 269 per cent to around 30,433 units during 2003. The surge in export demand comes close to the recent announcement by the parent company in South Korea that the Indian manufacturing plant is being made a global export hub.

The decision is part of the auto giant's plan to emerge as the world's top five car makers with global sales of five million cars by the end of the current decade from the current three million units.