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.