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– Bijoy Ghosh

Mr H.S. Lheem (right), Managing Director, Hyundai Motor India Ltd, and Mr Arvind Saxena, Senior Vice- President, Sales and Marketing, at a press conference in Chennai on Wednesday.

Our Bureau

Chennai, Nov. 5

A shift in preference in favour of smaller cars in Europe has helped Hyundai Motor India Ltd bag orders for the supply of 30,000 units of its latest model, the i20 hatchback.

The order, though small, has come in handy at difficult times, when the market has forced the company to scale down its sales target for 2008 to 5.10 lakh units, a good 70,000 units lower than its initial projection.

Even this estimate is not certain, says Mr H.S. Lheem, Managing Director, Hyundai Motor India Ltd.

“We are not able to make any final conclusion on the target for the year due to uncertainty in domestic market and postponement of purchases in export markets. However, we may conclude this year selling 5.1 lakh units,” Mr Lheem told journalists at a meeting organised here to announce the commencement of exports of the i20 cars.

The company today began shipping 2,820 units of the car to Europe. In fact, the first shipment was earlier expected to be about 6,000 units, but some delays related to quality-checks and postponement of purchase by a few overseas distributors, shrank the volumes.

Hyundai expects to export 1.20 lakh units of i20 next year. Hyundai’s export of engines to Korea and Malaysia would increase from about 40,000 units this year to 70,000 units next year. The company also planned to begin exporting completely knocked down (CKD) kits of its cars next year, for the cars to be assembled in the local plants. There is a demand for CKD kits because of the high import duty on fully built vehicles, according to Mr Lheem. CKD kits attracted a lower customs duty.

In the domestic market, the i20 would be launched by next January . The company hopes to sell about 15,000 units in the first year. Mr Lheem also indicated that there would a “facelift” for the Santro next year. Hyundai was working on a car smaller in size, engine displacement and lower in price than the Santro for a possible launch in 2011.

The company hopes to increase the numbers of engineers at its R&D centre in Hyderabad, a subsidiary company, to 1,050 from the current 250, he said.

Suggest measures to reduce the weight of the vehicle and you earn an incentive. This is one of Hyundai Motor India’s efforts to prune costs.

Every one gram reduction in weight brings an incentive of Rs 100, said Mr Lheem.

So far, suggestions to reduce a car’s weight by about 380 g have come in from the workers.

This weight reduction has two benefits: it saves on costs for the company and improves fuel efficiency for the vehicle owner.

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