The best endorsements for the attraction for investments in Tamil Nadu have come from several large companies. The Korean Hyundai Motors and the French Saint Gobain have been making repeated investments of sizeable amounts for expanding their operations. B C Datta, Vice President – Corporate Affairs, Hyundai Motor India Ltd, estimates his company’s investments, including the recent one committed at the GIM, around Rs 25,000 crore.
I remember a strong team from Hyundai avidly watching Ford Motors announcing its plans to set up a manufacturing facility near Chennai in January 1996. Impressed by the liberal incentives offered by the Tamil Nadu government, Hyundai firmed up its plan. I remember the hectic round-the-clock activity of the company in setting up state-of-the-art facilities at Irungattukottai near Sriperumbudur.
In my interactions with BVR Subbu, Director – Marketing during the construction stage, I noticed the company’s determination to commence production in just two years in 1998, a year ahead of Ford. Its small car Santro displayed at the Auto Expo 1998 in New Delhi, was an instant success. Santro was a runaway success right from its launch. The company, with production racing to over 650,000, maintains its record as the second largest manufacturer of passenger cars in India as also the leading exporter. Hyundai developed Chennai as the centre for small cars for exports.
Hyundai can take much of the credit for the transformation of Sriperumbudur region as the fastest growing industrial centre.
Hyundai walked along with it over a 100 Korean companies to supply components. The vendor base of over 140 concentrated around the mother plant ensured just-in-time delivery of components and parts.
Look at the consistent increase in production volumes. In 2017 Hyundai Motors sold 678,221 units. Of these it exported 150,901 cars. In the next year, it sold a record 710,012 units. Exports accounted for 160,010 units. Hyundai is one of the few units that recorded growth in exports despite adverse global market conditions.
Even more interesting things are in store at Hyundai Motors India. Datta mentioned the company’s plan to invest another Rs 6300 crore in the next three years on new products, development of power train, and setting up of a new office building. Of special interest is Hyundai’s plan to launch an all-electric vehicle by August-September 2019. This plan beats the leader Maruti by a year ahead.
Kia Motors India, part of the Hyundai Group, is setting up a green-field facility at Anantpur in AP for a production capacity of around 300,000 units per annum. Production is expected to commence by the middle of this year.
With consistent growth in volumes, Hyundai has been maintaining its price competitiveness. The switch to EV should prove to be a fore-runner in producing eco-friendly automobiles.
Prime Minister Narendra Modi is on a two-day visit to South Korea to strengthen further the economic and social relations between the two countries. He is also scheduled to receive the Seoul Peace Prize for 2018.
Leading Korean companies like Hyundai Motors, Kia Motors, LG Electronics and Samsung Electronics have made handsome investments in India and are thriving manufacturing enterprises in India.
Two-way trade between the two countries was in the region of $ 22 billion with Korea’s exports accounting for $ 15.62 billion and imports accounting for $ 5.89 billion in 2017-18. Hopefully, the Prime Minister will endeavour to balance the trade by higher exports of Indian products. – SV
