labels: in the news, hyundai motor india, passenger cars, marketing - general
Hyundai is fixated on the "i" news
Venkatachari Jagannathan
02 November 2007
Chennai: South Korean car group Hyundai seems to be fixated on `i'' series cars. The group''s Indian subsidiary Hyundai Motor India Limited yesterday held the global premiere of its new compact car, the i10, in Mumbai. (See: Hyundai adds style to the "A" segment with the i10). The model will be launched in other markets later.

The Korean group also plans to introduce a model called i20 replacing Getz sometime in 2008. In addition the group is designing a sedan to be called i30.

Says Heung Soo Lheem, managing director and CEO, "The group has plans to launch a new car in the `B'' segment. The model will be made in India for the global markets." The Korean group has designated India as its global hub for small cars. Presently Hyundai Motor India and ships out Santro and Getz.

The company says its export thrust will be high from next year onwards when i10 will be launched in the European markets. Moreover, the Korean group plans to use the Indian plant to cater to the global markets of i10.

According to Lheem, the Indian company would roll out 5.3 lakh cars during 2008. "Fifty per cent of the production will be exported. And 40 per cent of the production will be of i10 model." The current export order book position for i10 is 9,700 units.

Queried about the i10 cannibalising Santro sales, Arvind Saxena, vice president, sales and marketing, says, "There will be some cannibalisation. But it will not be a major worrying factor. Santro will be first car of choice for the buyers."

He hopes to sell around 2.3 lakh units next year both exports and domestic markets put together.
Eyeing tax incentives.

Meanwhile Hyundai Motor India is also trying to secure incentives from the Tamil Nadu government under the state''s ''ultra mega integrated automobile projects policy''.

The policy announced early this year offers attractive incentives to vehicle manufacturers, existing and new, who invest over Rs40 billion over a period of seven years from the date they sign the memorandum of understanding (MoU) with the Tamil Nadu government or any other date specified by the government.

The incentives include allotment of land at reduced rates, stamp duty exemption, dual feeder lines for power supply, exemption from electricity tax for 10 years and refund of gross output value added tax and central sales tax for 21 years or up to 115 per cent of eligible investment.

According to Lheem, Hyundai Motor India is implementing an expansion programme at an outlay of over Rs6,000 crore.

The investment programme includes setting up a new car plant and also building a new engine and transmission plant at its existing location near Chennai.

"The phase II expansion project is eligible for incentives under the government''s policy and talks are on with the officials in this regard," Lheem remarks.

Way back in 1996 when Ford India and Hyundai Motor set up their production plants near Chennai, the Tamil Nadu government offered them attractive and identical sales tax incentives.

Over the years, Hyundai Motor has benefited from the incentives as its volumes were far higher than Ford India''s.

Though Hyundai Motor got its India plans right at that time, it remains to be seen if this time it has caught the stick from the wrong end.

With Tata Motors announcing its Rs1-lakh car and the Renault-Bajaj combine too working towards a $3000 car, Lheem categorically says the company is interested in a public car and not in cheap car.

"We are interested in developing a car that would be cheaper than the current models and suitable for developing markets," he adds.

On the other hand he says the Indian company is not interested in getting into the light commercial vehicles segment.

"Rolling out a 1-tonne commercial vehicle to compete with Tata Ace at its price point is very tough," he explains.

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Hyundai is fixated on the "i"