India's largest car exporter Hyundai has stopped shipments from its Chennai plant to Europe after shifting production of models for the continent to the Korean auto major's plants in Turkey and Czech Republic.
The move will result in around 25 per cent reduction in overseas shipments from the company's Chennai plant this year at 190,000 units compared to 253,000 units last year.
The company's Indian arm Hyundai Motor India ltd will now focus on Latin America, West Asian, Australia and Asia apart from the domestic market.
"It has been about a month that we have stopped serving Europe, which will now be served by Hyundai plants in Turkey and Czech Republic," HMIL Senior vice-President Sales and Marketing Rakesh Srivastava told reporters in New Delhi.
Europe has been one of the largest markets for HMIL, the largest exporter of cars from India.
Last year the block accounted for 40 per cent of its exports from the Chennai plant that can roll out 680,000 units annually.
He said the step was taken up considering the need for immediate capacity at the Chennai to serve the requirement of the Indian market. HMIL's capacity utilisation of the Chennai plant was 98.5 per cent last year.
"In the last one year, we launched four brands in India.
“Therefore, we needed to create capacity. Our priority is the domestic market.
“So when the Turkey plant became ready Hyundai decided to move export of European model of i20 there. “Going forward all the European models of i20 and i10 will be served from Turkey and Czech Republic," he said.
The company's latest model Elite i20 will be produced in Turkey for the European market.
The company accounted for 45 per cent of the total cars exported from India last year.
Srivastava insisted HMIL's Chennai plant will still be a global hub for exports of small cars, as the Korean company had announced in the past and the move to serve Europe from elsewhere does not compromise that intent.
"India is still a global hub for exports for Hyundai.
“We will export to Latin America, West Asia, Australia and Asia from here," he said, adding, the decision to move European production to Turkey and Czech Republic by Hyundai was taken based on how to best utilise its seven plants across the world.
Explaining the company's decision of not investing for a new plant in India, he said: "To set up fresh capacity you need about 14-18 months."
Image: Hyundai Hexa.