Hyundai Motor Corp is thinking of shifting production of all its low-cost models to markets like India and China.
NEW DELHI: India is on the fast track to becoming a global hub for small cars.
Hyundai Motor Corp is thinking of shifting production of all its low-cost models to markets like India and China, so that it can concentrate on making high-margin models in the home market.
This follows Suzuki Motor Corp eyeing annual exports of 4 lakh units from the country by 2010.
To begin with, the Korean auto major may shift all production of its premium compact car Click — known as Getz in some markets — to India and stop making this model in the home market altogether. Already, India has become the only production base across the globe for Hyundai’s bread-and-butter model Santro. With the latest move, India could become the global hub for both, Santro and Getz.
Says Arvind Saxena of Hyundai Motor India: “India offers very good cost efficiencies. Hyundai is thinking in terms of moving all production of Getz to India but no final decision has been taken on the matter.”
Getz was launched in India two years back. At the time of its launch in 2004, the Indian consumer appeared rather hesitant to buy a hatchback pegged at the premium end of the market.
And last year, when market leader Maruti jumped in the fray with its Swift in the same price bracket, Getz sales suffered further.
According to Hyundai India figures, Getz sells only about 1,400-1,500 units a month in the domestic market against over 5,000 units a month by Maruti’s Swift. No Getz is being exported from India, but from South Korea, 15,000 Getz are exported every month to markets including Europe and South Africa. Last year, Hyundai produced 2,00,903 units of Getz in South Korea.
Saxena attributes the unsatisfactory sales of Getz in India to capacity constraints. “For Hyundai India, production of Santro is top priority since this model has a continuous backlog. We are producing and selling up to 13,000 Santros every month but still there is a three-month backlog of about 25,000 units. In this scenario, we are unable to produce more Getz.”
At present, there is no backlog for Getz. But with Hyundai India gearing up for capacity expansion - its second plant should go on stream late next year, taking total production capacity to 6 lakh units per annum- production constraints for Getz should lessen. But will exports be as robust from India two years from now? Only time will tell. Saxena declined to divulge the capex planned for Getz once the new facility is operational.
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