Hyundai Motor India Ltd. has set some lofty targets for themselves starting from 2018 and running up to 2020. The three-year period will see the company making concerted efforts in ramping up production, increasing the range of products and exports, and introducing electric vehicles.
BE’s Nikhil Raghavan spoke to Y. K. Koo, Managing Director and CEO, to find out what Hyundai is planning to do in given the slowdown in the economy and bleak investment situation.
Q. What is your target for the next three years?
A. The target for this year is to reach a 7-lakh figure out of which roughly 25% will constitute exports which includes South Africa, Middle East, etc. In 2019 we plan to increase production by another 50000 vehicles and if we keep up this staggered increase, we hope to break the one million mark by 2020. Last year we produced 6.78 lakh units.
Q. How would you achieve this?
A. The increase in production will not necessitate setting up more production lines but will be achieved through increasing UPO – Units Per Hour figures, which is how we have reached our current figures so far, from an original installed capacity of 6 lakh units. But, when it comes to EVs, if the demand does exceed our expectations, we may think in setting up additional lines.
Q. How has the investments been since inception and what will it be going forward?
A. From the time of its inception till date, a period of 20 years, our total investment has been Rs 21000 crore and in the next three years we plan to invest Rs 6500 crore. This investment will see the introduction of nine new offerings, comprising of two face lifts, two new segment products and four full model changes besides one EV. The EV will either be the Ionic SUV or the Kona sedan. We are currently testing and evaluating both in different markets to ascertain which will be ideally suited for an EV launch. One of the new products will be the brand new car under the well-established Santro label.
Q. How do you plan infrastructure for charging EVs?
A. We are fully prepared with complete solutions and products for the EV segment as well as for complying with Bharath VI emission norms due for 2020. While we cannot really wait for third party public-centric EV charging infrastructure to fall into place, we are ready with home charging kits for EV users. Initially these will be imported from Korea and depending on demand we will explore sourcing from vendors.
Q. How do you tackle competition?
A. We are the only manufacturer to have 5 ICOTY brands in the kitty and currently the new Verna is doing exceedingly well. And to negate rumours, the i30 will not be introduced here. The upgraded i20and the Elantra are settled in their respective markets and there is no point disrupting that. There will not new EV versions of any of the existing models.
We are also very happy to have bagged the JD Power award for customer satisfaction. Since we are not in the race for numbers, it does not make sense to meet the numbers of Maruti Suzuki, who have the advantage of range, capacity and number of years in the market. We want to maintain a unique positioning with our brands, models and range as well as quality and after sales service which are the key
areas for sustained growth.
Q. Do you see competition in the launch of Kia?
A. The forthcoming launch of Kia will not affect our business. To start with, Kia is our sister company but for all practical purposes, the ideology, ethos, strategies and products are all different. The platforms are different. The styling is different. The price points will be different. The vendor and dealer network, service points, and almost everything, other than the market which it addresses, will all be different. That has been the success of both Hyundai and Kia wherever they are available together.