Government of India encourages Hyundai to set up its 3rd plant in the country

India: During the Korea-India Industry and Infrastructure Forum, the Commerce and Industry Minister Nirmala Sitharaman encouraged Hyundai Motors to set up another manufacturing plant in the country, as there are steps taken by the government to improve business environment and push manufacturing.

While speaking at the Korea-India Industry and Infrastructure Forum, the minister said, “I do not think there are enough reasons for you (Hyundai) to think more about it. It's time that you set it up and this is a good time for Hyundai to announce this.” South Korean Minister for Trade, Industry & Energy (MOTIE) Joo Hyunghwan, was also present at the event. She further said, “The decision is apparently with the Hyundai leadership and I would only suggest that since they have two successful plants here, setting up of a third should not be an issue. Moreover, with this government looking forward to pushing the Make in India initiative.”

Hyundai presently has two plants located at Sriperumbudur near Chennai in Tamil Nadu. According to Young Key Koo, Managing Director and CEO of Hyundai Motors India Limited, the company is not planning to set up a new manufacturing facility in the country as it has an annual production capacity of 0.68 million units which can be stretched to 0.72 million units. While, Rakesh Srivastava, Senior Vice-President Marketing and Sales said that the company is looking forward to get clarity on important issues like GST and land acquisition before going ahead with a third plant.

According to a recent report published by TechSci Research, “India Tire Market Forecast and Opportunities, 2021’’, Expanding middle class population and increasing national disposable income is driving the demand for passenger cars in the country, in turn boosting the passenger car tire sales, which is expected to grow in the country. Also, presence of major automobile OEMs along with growing automobile sales would boost the demand for tires in the country.

TechSci Research is of the view that the setting up of a third manufacturing plant for Hyundai passenger cars would boost the demand for tires in the OEM tire segment, during the coming years. As, Hyundai exports its vehicles to around 92 countries in Africa, Middle East, Latin America, Australia and the Asia Pacific from its Chennai plant. There would be an opportunity for the passenger car tire manufacturers to enter into strategic tie-ups with the company to capitalise on the increasing production capacity.