Hyundai Motor to invest Rs 400 crore for setting up new plant

The company will expand its vehicle production capacity to 6.7 lakh units by next year at its two facilities and plans to roll out three new models in 2011.

"The feasibility study for the diesel engine plant has been completed and we will announce the location in the next few months. The plant is proposed to have an annual installed capacity of 1.5 lakh units," Hyundai Motor India Managing Director and CEO Han Woo Park told PTI.

The plant will manufacture three different engines of 1.1 litre, 1.4 litre and 1.6 litre capacities only for the domestic market.When asked about the investment, Park said: "Investment will be about Rs 400 crore... The plant will be operational in 2013 or early 2014."

The company is planning to utilise the engine from this new plant in the upcoming models and only a few will be used for replacing the existing model.

The company imports its diesel engines from Korea for its models such as 'i20' and 'Verna'. About 10 per cent of its sales come from the diesel model.On its production capacity, Park said, "Next year we are increasing our capacity to 6.7 lakh units from 6.3 lakh units by only increasing the efficiency and de-bottlenecking of operation. It will cost us negligible investment."

He said the company will launch 2-3 new models every year in order to expand its position in the growing Indian auto market."In 2011, we will launch model across all segments and this will be manufactured locally here," Park said.

Talking about its sales performance, HMIL Director (Marketing and Sales) Arvind Saxena said: "This year, we are expecting to sell 6.0 lakh units, of which 3.56 lakh cars will come from the domestic market."The company had sold 5.6 lakh units in 2009 and is targetting to sell 6.3 lakh units in 2011.

"We are expecting 4 lakh units from the domestic market next year and we will direct some of our exports to India. We have sacrificed our export volume this year also due to very high growth in the domestic market," Saxena added.

When asked about the proposed 800 cc car, Park said: "The small car is under development... It will be launched in 2011 or early 2012 and will be positioned below.

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