Hyundai Motor Expands India Market Strategy... Invests 3.2 Trillion KRW Over 10 Years

MOU with Local State Government... Investment in Electric Vehicle Ecosystem and Production Facility Modernization

Hyundai Motor Company (Hyundai) plans to invest 3.2 trillion won over 10 years to target the Indian automobile market.

Hyundai's Indian subsidiary announced on the 11th that it signed a Memorandum of Understanding (MOU) with the Indian state of Tamil Nadu to invest 200 billion rupees (approximately 3.24 trillion won) over the next 10 years.

The annual production capacity of Hyundai's Plants 1 and 2 in Chennai, Tamil Nadu, is about 760,000 units, of which around 150,000 units are exported. Following the signing of this MOU, Hyundai plans to allocate the investment toward building an electric vehicle ecosystem and modernizing production facilities. Specifically, it will construct an advanced electric vehicle battery pack assembly plant. The annual production capacity of this plant is expected to reach 178,000 units.

Additionally, Hyundai will build electric vehicle charging stations at 100 key locations across Tamil Nadu, including highways, over the next five years. Hyundai has announced plans to sequentially launch six electric vehicle models, including the Ioniq 5, by 2028 to expand its market share. At the same time, Hyundai revealed plans to increase the annual production capacity of its Chennai plant to 850,000 units.

Hyundai Motor India Headquarters
Photo by Yonhap News

Alongside this, Hyundai is also pursuing the acquisition of a foreign automobile factory locally for the first time since entering the Indian market in 1996. In March, Hyundai's Indian subsidiary signed a legally binding term sheet regarding the acquisition of General Motors (GM)'s Talegaon plant. A term sheet is generally prepared before the main contract to thoroughly assess the investment target's conditions, such as land, buildings, and production facilities. According to the Indian media outlet Autocar Pro, the Talegaon plant has an annual production capacity of 130,000 vehicles and 160,000 engines. With the acquisition of the GM plant and the full-scale investment in the Chennai plant, Hyundai's local production volume in India is expected to increase to around 1 million units.

Hyundai's aggressive expansion of investment in the Indian market is interpreted as a reflection of its positive outlook on the market's growth potential. Last year, the domestic sales volume of the Indian automobile market reached 4.725 million units, surpassing Japan and ranking third globally after China and the United States, showing significant annual growth.

The Indian government's active promotion of the electric vehicle market is also a favorable factor. The Indian government plans to raise the share of electric vehicles to 30% of total automobile sales by 2030 through investments in electric vehicle infrastructure. Recently, it also announced plans to increase tariffs on imported vehicles, including electric vehicles, to encourage local production and investment expansion.

Currently, Hyundai holds the second-largest market share in India, with a mid-to-high 10% share, following Maruti Suzuki. Last year, Hyundai's sales volume in the Indian market increased by 9.4% year-on-year to 552,511 units.

This content was produced with the assistance of AI translation services.