Hyundai Motor Company (HMC) is likely to pump in $700 million (about Rs 3,150 crore) for expansion in India. The expansion will include setting up of its second plant adjacent to its existing facility at Irungattukottai, about 50 km west of Chennai.
Chung Mong Koo, chairman of the South Korean auto major; H S Lheem, managing director of Hyundai Motor India (HMI) -- the wholly-owned subsidiary of HMC; and other top officials of HMC today met Tamil Nadu Chief Minister M Karunanidhi and discussed the company's investment plans in Tamil Nadu. The company has been asking for support package from the state government for its expansion in Chennai. According to government sources, the package is under consideration.
A company statement quoting Koo said the Indian auto market had great potential and "we are expecting over 400 per cent growth within the next decade". The second car plant, slated to be completed by October 2007, will help the company increase its yearly export volumes to 3,00,000 units, raising HMI's total production capacity to 6,00,000 units.
The company also plans to roll out a new compact car, in addition to Santro.
With the domestic automotive industry growing at a rapid pace, the market volume is expected to touch 970,000 units in 2006 compared with 850,000 units in 2005. By 2010, the volume is likely to further grow up to 1.62 million units.
HMI was aiming at an all-time high pie of above 20 per cent in this market, the statement said. Indian unit would become HMC's export hub for small cars, Koo said, in the release.
