"The auto industry in India beginning to blossom"
(Y S Kim, Managing Director,Hyundai Motors India Limited )
Hyundai, is unknown to few especially in the automobile segment. This Korean car major, after getting formal approvals to set up shop in 26th May 1996 in Tamilnadu, India worked with dogged determination; its first car therefore rolled out in May 1998, within 18 months since the first stone was laid. The company has invested USD 614 million in the first phase. It has a full production unit, not just assembly, where it has a capacity to make 1,20,000 cars per annum. Two models, Santro and Accent have received good response from the Indian market.
In its second phase, the company hopes to expand facilities to make 200,000 cars per annum, which calls for an investment of USD400 million. Y S Kim, managing director, Hyundai Motors India Limited, has held the post since inception. He has expressed herein some of his views on the global scenario for auto and auto-components.
Q: What is your view on the status of the auto industry today in India?
How does this compare with other Asian countries?A: The auto industry in India is just beginning to blossom and I see a bright future for it in India. With a large middle income population, whose purchasing power is growing, the Indian passenger car industry will do very well. Growth of this industry in other Asian countries will also be good.
Q: What impact does this have at present on the auto component industry world over?
A: Any growth in the core sector is bound to have its impact on the Ancillaries as well.
Q: Which segment of the auto sector in India is at its best today and how much growth do you see year on year in this segment?
A: The passenger car industry looks its best today. Within this, the mid-car segment is likely to grow at a rapid pace.
Q: Are you satisfied with the response to your vehicles in India? Please give numbers. Are you planning new models in the near future? If so, any details
A: We are very much satisfied with the response to our cars in India. We crossed the magic figure of 100,00 cars in less than 19 months and will be completing sale of 150,000 cars in just under 25 months. Our new model is the 2.5 litre luxury car 'Sonata'. We are likely to launch this in the beginning of the next financial year.
Q: Are you happy with the OE supplies to Hyundai in India? Are suppliers here comparable with global ones? If not, where do they lack and where do they need to improve?
A: We are happy with our OE suppliers. We have set international standards for ourselves as well as our suppliers.
Q: Who are your key component makers? How much have of your car production - both Santro and Accent- have you indigenised?
A: We started off with an indigenisation level of 70% from day one for the Santro and now it is more than 85%. The indigenisation level for the Accent is more than 75%.
Q: Is there a shake-out expected in the global auto industry? What effect will this have on the component makers?
A: The future is likely to see amalgamations and mergers by global auto majors.
Q: What is your view on the government policy in India with reference to the auto industry? How is it different from that in Korea?
A: The government's approach to the Indian auto industry has been very positive and we are happy with the governments policy .
Q: What were the main hurdles you faced (or are still facing) with respect to procurement of parts for your company?
A: We did not face any hurdles in procuring parts as we believe in a single vendor policy for all the components.
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