The Hindu Business Line : Connectivity constraints bother Hyundai Motors

Plans ahead
Carmaker eyes a 35 per cent increase in its exports next year.
Hyundai recently signed a 12-year concession agreement with Chennai port trust.

Bangalore June 8 Connectivity constraints over export of its cars is worrying Hyundai Motors, even as the company eyes a 35 per cent increase in its exports next year.

"Connectivity from the plant to the port is turning out to be an issue," the Hyundai Motor India's Vice-President for Marketing and Sales, Mr Aravind Saxena, told Business Line. Hyundai will export 1.15 lakh car units this year and in value terms, it will be around Rs 2,500 crore.

It expects to export at least 50 per cent of its total production out of India by 2008 and an increase of between 30 and 35 per cent in value terms next year.

Dedicated corridor

Mr Saxena said the limited window of 10 p.m. to 5 a.m. is not enough for the carmaker to transport its products and hence has sought a dedicated corridor for transporting them. "We want the Government to allow us to transport the cars the entire day, instead of allotting us only a limited time period," he said. "We are requesting the Government to allow us more time or even a railway line for us," he said.

But Hyundai's problems will be compounded when the second plant starts operations, which will double the production towards the end of the current calendar year. "It could lead to a big problem in case our exports are doubled," Mr Saxena said. When the second car plant starts operations, the exports could go up to about 3 lakh units per year, which will be half of the total production of cars of Hyundai in India from next year.

New agreement

Mr Saxena, however, said the carmaker's new agreement with the Chennai Port Trust is being seen as a positive signal from the Government. Hyundai recently signed a 12-year concession agreement with the port trust. The agreement allows concessions in wharfage rate and vessel related charges for the company.

Hyundai exports cars from India to around 67 countries, including some in Europe. Mr Saxena said one of the reasons for rise in exports from its Indian plant is because of the high quality levels achieved by the company.

"We are not just cost efficient. Cars produced in India have achieved world standards," Mr Saxena said. The latest model, which the company will start exporting, will be Getz, which the company believes will be the second largest after Santro.