The ongoing Israel-Hamas conflict may have had some implications on certain industries but automobile companies in India are yet to witness any impact. For the country’s largest passenger vehicle exporter Hyundai Motor India Limited (HMIL), it is business as usual as its volumes have not declined over the last few months.
A senior company official asserted that the models shipped to Israel are very different from the ones offered in the Indian and European markets, and that the dependency of components from the West Asian nation is also negligible.
Unsoo Kim, managing director and chief executive officer, Hyundai Motor India Ltd (HMIL), told Moneycontrol, “Actually so far, our volumes and exports depend on the (global) economic situation. Currently, our (exports to) Middle Eastern countries are not affecting our volumes because of the West Asia conflict. The Israeli customer has different kinds of models from Indian or European ones. We are focussing on the Middle East, Africa and South America.”
Asked if the company foresees any impact on its sourcing strategy, Kim said, “For several years, there were semiconductor availability issues but now the situation has improved dramatically. We don’t import from Russia or the Middle East.”
However, he maintained, “The overall economic situation is important. High interest rates in the US, the global economic downturn, food supply is getting affected, which is also a problem. I hope the matter will be resolved.”
HMIL said it is confident of hitting a seven-digit figure production milestone (1 million units per annum) in the next few years. The South Korean carmaker is taking a series of measures to achieving that feat.
“We plan on achieving this through capacity optimisation at our Sriperumbudur plant and capacity addition through our upcoming Talegaon plant (acquired from GM India) where production is scheduled to commence from 2025,” added Kim.
On the growth outlook for 2024, Kim maintained that it is very optimistic for this calendar year but added that he could not predict the future due to the geopolitical tensions in the Middle East and war between Russia and Ukraine.
“What I can tell you is (that) India will do better than other countries such as China, US or Western Europe. Thanks to some of the government initiative and the nation’s aspiration to grow, I am very confident that the outlook will be positive in 2024,” stated Kim.
Hyundai also revealed that it has enhanced its share from India in the global sales pie, from 15.6 percent in 2019 to 18.6 percent in 2023 (January-September). The carmaker is now aiming for a 20 percent share from India in the medium term.
“The US is the number one market for Hyundai Motor Company at the moment. Several years ago, China was number one but the share has declined. The EU market, consisting of 27 countries, is currently at number three. We aim to be the number one (market) in the near future, “affirmed the HMIL MD and CEO.
After a recent capacity addition of 50,000 units at its Sriperumbudur plant in Tamil Nadu, HMIL can now churn out 8.2 passenger vehicles per annum.
Kim said that as India is moving towards an electric vehicle (EV) revolution, HMIL plans on investing Rs 20,000 crore strategically towards building an EV ecosystem here. He added that HMIL is also developing a hub for next-generation EV batteries through an upcoming state-of-the-art battery pack assembly facility in Tamil Nadu.
In his view, the decrease in EV volumes is temporary and the market will revive soon. “The global EV market is coming down because of the Ukraine war. Earlier, European countries wanted to reduce CO2 levels. Because of global conflicts, (automobile) companies cannot focus on resource allocation (towards EVs) . However it is a temporary setback and the EV market will bounce back,” he said.
Hyundai is looking to close calendar year 2023 with an all-time high domestic sales milestone of 6 lakh units as it continues to see strong demand for its SUVs. The company revealed that the recently launched micro SUV Exter had garnered over 1 lakh bookings.
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