Hyundai To Set up Diesel Engine Plant in India


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New engine plant to give Hyundai an edge in diesel car offerings

India’s second-largest car manufacturer Hyundai Motor India (HMIL) is all set for larger diesel drive. The $300-million flexible engine plant, to be opened shortly, will offer Hyundai enough room to drive more diesel offerings than earlier to take on the competition from across all major players, who have lined up a slew of petrol and diesel variants to woo customers in a big way.

The company, which has two gasoline engine plants with a total capacity of 6.5 lakh units per annum, will make diesel engines for the first time. The diesel plant will have a capacity of 300,000 units per annum, thereby enabling Hyundai to increase sale of existing diesel models such as Verna, Santa Fe, i20 and Elantra as well introduce new products.

Interestingly, Hyundai has created a huge engine capacity of 9.5 lakh units per annum through three plants, keeping in mind the huge potential in India as well as exports.

“Currently, diesel contributes 25% of our domestic sales, that is around 100,000 units (in 2012 domestic sales were at 3.91 lakh units) as we import and sell it in India, which involves high cost. The new plant not only gives us a cost advantage but also give us enough room to push more diesel car offerings based on demand,” said HMIL director (finance & corporate affairs) R Sethuraman.

Speaking to the FE, he said: “We see the flexible engine plant saving us costs by way of import duty, transport/logistics costs apart from helping us avoid deliveryschedule failures. It also helps the company localise new products to the maximum extent possible as all our existing products are localised to the extent of 95% to 98%.”

Having set an internal target to sell 6.7 lakh units in 2013 with a major focus on domestic market, the new diesel engine plant will play a major role as the company decides to launch its two new products — a new car code named ‘BA’ to be positioned between i10 and i20 as well as an utility vehicle during the second half of this year. “The new car will be offered in both petrol and diesel versions,” Sethuraman added.

According to him, of the total petrol engines capacity of 6.5 lakh (two plants) per annum, Hyundai is at present exporting 6,000 engines on an average per month to countries like Turkey and Malaysia. However, the new launches will be offered in both petrol and diesel versions, he pointed out.

source:New engine plant to give Hyundai an edge in diesel car offerings
 
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