Hyundai Motor Co, based in South Korea, announced its plan to invest 200 billion rupees ($2.45 billion) in the Indian state of Tamil Nadu over the next decade. The objective of this investment is to strengthen electric vehicle (EV) production in India, which has the world’s largest population.
Chennai, known as the Detroit of Asia, is a major hub for automobile manufacturing in Tamil Nadu. Several prominent companies such as Ashok Leyland, TVS Motor, and Renault-Nissan produce millions of vehicles in this region annually.
Hyundai, through its Indian subsidiary Hyundai Motor India, will establish a battery pack assembly unit with an annual capacity of 178,000 units. Additionally, the company plans to install 100 EV charging stations across the southern state within the next five years, as stated in a company statement.
Hyundai aims to increase the production volume at its factory near Chennai from the current level of approximately 775,000 vehicles per year to 850,000 vehicles per year. However, the company has not specified a timeline to achieve this target due to volatile demand conditions.
Furthermore, Hyundai anticipates that its export volumes will reach 319,000 vehicles by 2032, compared to 181,000 vehicles in 2022.
This investment plan follows the recent announcement by the Indian government to increase taxes on imported vehicles in order to boost local manufacturing.
Hyundai is also focused on developing a local vendor base for EV parts instead of relying on imports. This decision is motivated by the fact that the government’s production incentive scheme is applicable only when manufacturing is conducted within the country, according to Puneet Anand, a senior executive for corporate affairs, during a news conference.
India’s EV industry is experiencing rapid growth, with numerous launches by domestic carmakers Tata Motors and Mahindra & Mahindra, as well as global competitors Nissan Motor and Renault SA.
Hyundai has plans to introduce five new EV models in India, the third-largest car market in the world. The company aims to capture a 20% market share in the country by 2032.
However, India’s EV market is still relatively small, accounting for only about 1% of the total car sales in 2022. The federal government has set a target to increase this share to 30% by 2030.
In India’s passenger vehicle market, Hyundai currently holds a 15% share, ranking second behind the leading automaker Maruti Suzuki India, the local unit of Japan’s Suzuki Motor.
Source: Reuters