Hyundai, Kia aim to raise Indian sales after record output

Hyundai Motor Co. and Kia Corp., South Korea’s two largest automakers, aim to raise sales by 4.2% in India this year after logging record vehicle output in the world’s third-largest car market in 2023 for the third straight year.

Hyundai and Kia plan to sell 893,000 vehicles together in 2024 in the South Asian country, compared to 856,667 units last year, according to industry sources in Seoul on Wednesday. Their sales volume in 2023 was 6.1% higher than the previous year.

The two automaking units of Hyundai Motor Group, the world’s No. 3 carmaker, manufactured 1.08 million vehicles in total there last year, up 3.8%. Hyundai and Kia produced 765,000 vehicles and 319,878 cars, respectively.

TALEGAON PLANT

Hyundai has been expanding its production bases in India as sales in the country are expected to grow further, given solid economic growth in the country.

India, Asia’s third-largest economy, grew more than 6% for a third straight year in 2023, while the local automobile market expanded by some 13% compared to 2021.

The Exter compact sport utility vehicle (SUV) maker, which built two plants – one in 1998 and the other in 2008 – in the country, is producing about 600,000-700,000 vehicles a year there for local sales and exports. The company currently manufactures about 10 models, including the Creta and Venue subcompact crossover SUVs.

It ramped up the annual combined capacity of those two factories to 850,000 units with facility investments in the first half of last year.

Hyundai plans to next year start operations of a car manufacturing plant with a capacity of 130,000 cars a year in Talegaon, Maharashtra, which it acquired from General Motors Co. in 2023. The move is expected to increase Hyundai’s annual production volume in India to nearly 1 million automobiles.

Kia, which opened a plant there in 2019, produced more than 300,000 units in 2022 and 2023. The maker of the Sonet and Seltos crossover SUVs also manufactures the Carens and the Carnival minivans there.

TO INVEST OVER $4 BILLION

Hyundai has recently unveiled a series of investment plans worth more than $4 billion in India.

In January, the company agreed to spend 70 billion Indian rupees ($845 million) to expand and upgrade the Talegaon factory.

It also decided to invest $744 million in a dedicated hydrogen resource center and other projects in the state of Tamil Nadu.

Those plans were on top of its previous decision announced in May last year to spend 200 billion rupees over a decade from 2023 to expand its electric vehicle business in one of the world’s fastest-growing eco-friendly car markets. The country’s EV sales increased to 48,000 units in 2022 from some 15,000 units in 2021 and 5,000 units in 2020.

The country’s SUV market, which makes up half of the total demand, totaled about 2 million units last year, about a triple of some 700,000 units in 2020.

Hyundai is expected to actively invest in India to take the lead in the Indian EV market while maintaining its control over the internal combustion engine car market with SUV models.

Write to Jin-Won Kim at jin1@hankyung.com
 
Jongwoo Cheon edited this article.