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Local assembly of Hyundai Santa Fe may start soon

Roudra Bhattacharya New Delhi | Updated on May 22, 2011

The Hyundai Santa Fe

To open orders for second lot after June





Hyundai Motor, the second largest domestic carmaker, may soon start assembly of the Santa Fe sports utility vehicle (SUV) in India. It will also start taking new bookings for the vehicle from around June.

According to sources, the Santa Fe is currently undergoing homologation duties at the Government-owned Automotive Research Association of India, Pune. As part of the Korean company's plan to locally assemble the SUV from completely knocked down (CKD) kits, a few body shells are being subjected to structural stress tests at the facility. Such testing is usually done a few months before local assembly starts.

Asked about such a development, Mr Arvind Saxena, Director, Marketing and Sales, Hyundai Motor India, told Business Line, “Starting CKD operations for the Santa Fe is part of our plan. Typically, we would wait for volumes to touch at least 150 units a month for it to make sense economically. At present, we are doing about 100 units a month.”

Though currently imported as completely built units (CBUs), local assembly will help Hyundai price the Santa Fe more competitively versus competition, such as the Toyota Fortuner (Rs 20.1 lakh in Delhi) and the Ford Endeavour (Rs 17-20 lakh). Currently, the Santa Fe is a bit more expensive at Rs 21-23 lakh, largely on account of high import duties of 60 per cent accorded to CBUs. In contrast, CKD kits attract a 10 per cent import duty.

Opening Bookings

The Santa Fe, Hyundai's only SUV in India and a popular vehicle in major markets like the US, would touch sales of 600 units between launch in October, 2010 and June this year. Though the company had stopped taking further bookings after reaching its initial target, it plans to again start fresh orders from after June for a second batch of around 600-800 units, Mr Saxena said.

“We will look to service the second lots of bookings in the next 6-8 months. Our target is to sell about 1,400 units of the Santa Fe in a year's time,” he said.

Growth target

Hyundai, which is building its first diesel engine plant in India on the back of rising popularity of diesel vehicles, aims to grow between 10-12 per cent this year. It hopes to sell four lakh units (3.56 lakh units in 2010) in the domestic market in 2011, while exporting another 2.25 lakh units.

“At Chennai, we can produce 6.6 lakh units a year and a bit more if needed through balancing of assembly lines. We do not feel that we are immediately strapped for capacity, though if needed the domestic market will take priority over exports,” said Mr Saxena.

> roudra.b@thehindu.co.in

Published on May 22, 2011

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