The Hindu Business Line : We have aggressive R&D plans for India, says Hyundai’s Lheem

We are in the process of setting up a second petrol engine facility with a capacity of three lakh units as part of our second phase of investments. — Mr H.S. Lheem, MD, Hyundai India

Priyanka Vyas

New Delhi, Jan. 14 After emerging as the second largest passenger car maker and a leading exporter, Hyundai Motor India’s strategy does not end with its manufacturing operations.

Business Line met Hyundai Motor India’s Managing Director, Mr H.S. Lheem, at the ongoing Auto Expo, who shared the company’s plans to climb the value chain as India becomes pivotal for the parent company’s global operations.

Everybody is all praise for Tata’s Nano. How do you like it and what are your plans to produce a car in the same segment?

It’s a good concept car. But we should wait for a while once the production begins. We are looking at bringing out a public car which will be out in four- five years’ time.

We are already working on developing it.

How do you define a public car?

Well, it will be affordable. But I can’t comment on the price. However, it will be less than the Santro. We are looking at manufacturing it here for the domestic market as well as exporting it.

India has been the launch pad for your i10 and you also plan the same for i20. By what time do you see your global cars also designed from here ?

We have very aggressive plans for India with respect to R&D operations.

We have 100 people in Chennai and 190 in Hyderabad who are working on future models using computer aided design. By 2009, we will employ 800-1,000 at our development centres.

However, it will not be complete designing of a car, but some components of it.

Maruti Suzuki is setting up a diesel engine plant and would also expand it for exports. GM too is considering the same kind of project. What are your plans?

We are in the process of setting up a second petrol engine facility with a capacity of three lakh units as part of our second phase of investments. Currently, we are importing about 40,000 diesel engines from Korea.

Once the volumes reach 50,000 units or more, we are looking at a facility for mass production of diesel engines. But what are the incentives that the Indian Government gives for transfer of technology from Korea to India and for creating huge employment?

There are no benefits to the automotive industry like in other countries. One of the reasons for setting up the facility would be to bring down costs.

But if we have to incur the same amount for investing in a new facility and product development, it is a huge investment.

You are a dominant player in the compact car segment. How do you plan to strengthen your position in the mid-sized and premium sedan segment where your sales are lower?

Globally, we want to make India a hub for compact cars. In the domestic mid-sized sedan segment, Accent is doing well.

We are doing a feasibility study to launch Avante in India. Besides, we would launch LPG Santro and Getz this year.

What is your outlook on the automotive industry in the context of India and globally?

We have a different strategy. When our production reaches 5.3 lakh vehicles, 50 per cent will be exported and 50 per cent will be sold in the domestic market. When we reach that stage, more than 75 per cent of exports from India in the passenger car segment will be of Hyundai.