Hyundai may cut exports to meet zooming domestic demand

India's second-largest carmaker Hyundai Motor India (HMI), an arm of the South Korean Hyundai Motor Co, plans to tweak its existing Indian operations as well as prune exports to meet the burgeoning domestic demand.

Hyundai's total capacity will go up to 6.7 lakh cars in next two years from the current 5.9 lakh units per year with minor investment at its twin plants in Chennai, as it aims to take its share to 22 per cent of the total cars sold in the domestic market from the current 20 per cent. In 2010, the company expects to sell 3.4 lakh units from 2.9 lakh units sold in 2009.

The company, which is setting up its third plant in China, has not firmed up a similar plan for India, where it has been facing a prolonged labour unrest that is yet to be settled.

At the launch of a new version of its bestselling hatchback i10, H W Park, chief executive and managing director, HMI, said the company still has enough capacity to meet the market demand. ''Right now the domestic demand is very high and we can supply more because we are following a portfolio.

So we export less and sell more in the domestic market,'' he said. ''Hyundai is not considering a new plant because there's no production constraint right now.''

Park also said that for now Hyundai is not linking investment decisions to its labour problems. ''We decided not to link labour relations to investment and we are trying not to relate the two now. We feel the labour problem is not serious and we can resolve it with support from the Tamil Nadu government.