The Hindu Business Line : Hyundai may see lower revenue growth

Bangalore May 6 Hyundai Motor India expects lower revenues during the current fiscal even though it has lined up several passenger cars for launch during the year.

Hyundai Motors India Managing Director, Mr H.S. Lheem, told Business Line that the automaker expects an increase in revenues of between 10 and 12 per cent. During the previous year, the company's revenues increased 16-18 per cent.

In terms of volume, the company expects a growth of 20 per cent, he said. Auto analysts say that higher interest rates and increase in competition because of more launches from other carmakers may see Hyundai's sales slow down slightly.

Product line-up

Mr Lheem said the company is working on twin 1.1 litre models for the market. Code-named PA, they will be launched in the A Plus segment. As already announced, the new version of Santro will be launched towards mid-October this year.

There is also a possibility of launching the 1.1 litre model code named PA with diesel engine. This could happen later next year, he said. The Getz diesel version will also be launched later during this year.

Mr Lheem said that with Hyundai committing investment of Rs 6,000 crore for the phase-two expansion in India, the number of dealers will also be increased to about 400 by next year from the current level of 184 dealers. The service network, too, would be expanded to about 1,000 during the current year.

The new investment will see production being doubled to 6 lakh units by the end of 2007. There is also a likelihood of Hyundai looking at setting up another plant, as the existing land near Chennai is good enough for only 6 lakh car units.

In case Hyundai decides to expand the capacity further, it will have to take a call on whether it should buy land nearer to its existing plant or scout for land elsewhere. Hyundai, which exports nearly 63 per cent of its production, is expected to bring it down to about 50 per cent by 2010.

Hyundai had earlier declared that it will give preference to domestic demand rather than to its export obligations. Hyundai Motor India sold 2,99,153 vehicles in calendar year 2006, registering an increase of 18.5 per cent over 2005.