Hyundai Motor Company, the largest automobile company in South Korea plans to build its first diesel-engine factory in India, a senior executive said.meanwhile
Hyundai India said that it will raise diesel engine imports from South Korea by 50% to cut long waiting periods for its Verna sedan and the i20 hatchback.
“The supply of both the diesel cars taken together will go up almost 50 percent from the existing 7,000 units per month to 10,500 units per month.”
“We expect the waiting period for the diesel Verna to drop from six months to two to three months and for the new i20 to about a month,” said Arvind Saxena, director for marketing and sales at Hyundai Motor India.
even then i dont see them reducing market prices until they start to lose their market share.
AFAIK there is an FTA (free trade agreement ) done with countries like thailand which helps companies like honda and toyota to bring their total input costs down but i dont see any huge price reduction on their side.
the price reduction on the city happened because they dont have a diesel in their line up and had to revive the sagging sales.
In a piquant situation, Korean car maker Hyundai is starting from the scratch on plans to set up a diesel engine manufacturing plant in India with a fresh feasibility study, reversing an earlier Rs 400 crore proposal.
The company's wholly-owned arm, Hyundai Motor India Ltd (HMIL) had in 2010 announced to invest Rs 400 crore on a diesel engine plant under its then head Han Woo Park. It was, however, put on hold last year following slump in the market.
According to industry sources, HMIL has decided to revisit the entire project with a fresh feasibility study following a change in guard at the top management in March this year.
Park was replaced as Managing Director by Bo Shin Seo and returned to Korea as Chief Financial Officer of Kia Motors, an arm of the company's parent firm Hyundai Motor Co.
When contacted, a company spokesperson said: "Our feasibility study is going on. After that, we will decide whether we will go ahead with the plant or not."
It was expected that HMIL will go ahead with the plant in India after Budget spared the auto industry from 'diesel tax' and with the price of petrol much higher than that of diesel, the demand for diesel vehicles has jumped.
A source in the know of the development described the latest development regarding the company's diesel plant as "a strange move".
"The plant was earlier announced in 2010 after completing all the due processes and with all the necessary precautions. However, with the new MD and some new senior officials coming in, the company has started again the feasibility study," a source said.
In November last year, HMIL had put on hold its plan to set up a diesel engine manufacturing unit at an investment of Rs 400 crore due to the slowdown in the automotive market.
HMIL at that time had said it would hold the construction of the proposed plant at least for the "medium term".
The plant, which was announced by Park in December 2010, was envisaged to have an annual capacity of 1.5 lakh units for three types of engines -- 1.1 litre, 1.4 litre and 1.6 litre for the domestic market.
After the Budget in March this year, the company had said it would review setting up of the plant.
"We have to weigh the pros and cons as there has been no mention of diesel tax in the Budget. Within two weeks we will be taking a decision on whether we should go ahead with our diesel plant or not," a spokesperson for HMIL had said.
At present, the company imports diesel engines from Korea for its models such as 'i20' and 'Verna'. HMIL has an installed capacity to produce 6.7 lakh vehicles per annum.
The lack of clarity over the fuel price policy from the government has forced the second largest car maker Hyundai Motor India Ltd (HMIL) to officially put its plans for a diesel engine plant in India on hold. A report in The Business Line reported Bo Shin Seo, Managing Director, Hyundai Motor India as saying “We have no decision on the diesel plant from the head office and continue to watch the government policy closely. To meet the high demand, we have increased the supply from Korea and can continue to do so further.”
It was reported that the company will continue to rely on imports of diesel engines from South Korea to meet the increased demand for diesel models such as the i20 hatch and the Verna sedan. It is also increasing exports of models with petrol engines (the i10 and the Eon) to utilise the existing capacity of 5.5 lakh engines a year at its Chennai plant. Diesel variants for the i10 and the Eon are not under consideration right now, Bo Shin Seo said, according to the report.
Hyundai, the second largest domestic carmaker, has been studying the possibility of assembling diesel engines in India since 2009, but has not been able to make a viable business case for investment to the parent firm in Korea, supplier and company sources said. The decision to put the diesel engine plant plan on hold comes at a time when close to half of the car market shifted to diesel cars in the last year. Meanwhile, market leader Maruti Suzuki is investing Rs 1,700 crore to double its annual diesel engine capacity to six lakh by 2014. In the interim, it is also sourcing one lakh diesel engines a year from Fiat India. Honda Siel, which currently sells only petrol models in the country, is also reportedly working on small diesel engine thar will debut first in Europe, followed by India. This is expected to boost sales of its Brio, Jazz and City models, according to the reports.
Good move Hyundai.. these are fully entering themselves into waters of indian market . this is a good move considering the price of diesel and also with markets maturity towards diesel fuel. now the market need is diesel and not matter how much is the difference between both fuels narrows , i feel demand for diesel will be consistent.
This korean have much understood indian market and refreshing thier product line up with timely facelifts and launches.
best days ahead Hyundai...
Hyundai Motor India Limited on Thursday announced investments of $300 million in a flexible engine plant and a new press shop, apart from ongoing investments in new models. The Press and Engine shop will come up at the existing location at Sriperumbudur in Chennai.
The company is all set to sign an MoU with the Government of Tamil Nadu on November 5.
This investment will offer customers more diesel options across segments and create direct employment opportunity for 500 persons. The proposed engine plant and other facilities will be set up within the premises of HMIL at Irungattukkottai in Chennai.