Companies

India pips China as Hyundai’s largest overseas production base

G Balachandar Chennai | Updated on August 19, 2019 Published on August 19, 2019

Chennai factory produced more than carmaker’s China units in H1

The gloom in the domestic automotive sector has a silver lining. India has replaced China as the largest overseas manufacturing operation for Hyundai Motor Company.

During the first half of this calendar year, the South Korean car maker’s factory in Chennai produced more vehicles than the combined production of its units in China. The India volume is now second only to Hyundai’s domestic output in South Korea.

According to reports quoting data from the Korea Automobile Manufacturers Association, Hyundai Motor produced 3,51,837 vehicles in India during the January-June 2019 period (up from 3,48,068 in H1 2018) as against the total production of 2,88,060 units in China (3,78,629 units in H1 2018).

Hyundai Motor India (HMI), which is the second-largest brand after Maruti Suzuki in the country, has been faring better than its rivals in the Indian market, which is witnessing a sharp slowdown in demand. During the April-July 2019 period, the Indian passenger vehicle market fell 22 per cent to 9.13 lakh units.

While almost all automobile brands reported a double-digit decline in sales volumes (in the range of 16 to 50 per cent) during this period, Hyundai’s decline was in single digits (8 per cent). HMI, which is also a hub for compact cars, exported 86,500 units to over 100 countries in H1 2019.

According to experts, Hyundai’s strategy of periodic launches is keeping the momentum alive for the brand. Its latest product ‘Venue’ has received an overwhelming response with more than 50,000 bookings.

The fact that Hyundai’s China operations took a strong hit also helped HMI power ahead. Its volumes there fell sharply, by 34 per cent, in H1 2019 compared to the same period last year.

Though both countries are facing a slump in automobile demand, Hyundai sees India as a stronger long-term bet than China. The company’s market share in China is in low single digits and has been declining over the years. In comparison, Hyundai’s India market share is a strong 18 per cent and growing.

It is perhaps not surprising then that Hyundai’s subsidiary Kia Motors recently invested in a three-lakh car manufacturing facility in Andhra Pradesh and has already started commercial production of its first product, Seltos, an SUV.

Published on August 19, 2019
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