Hyundai Motor India Fine-tunes For Production Ramp-Up

By T Murrali:

Y K Koo, Managing Director and CEO, Hyundai Motor India Ltd (HMIL), has reasons to cheer as the company’s production capacity has been on the rise since he took over in November 2015. The annual capacity of HMIL has swelled from 600,000 to 700,000 units without raising the footprint. Though seemingly insignificant, it makes big sense as many other players have not been expanding besides, losing market share to competition.
HMIL’s contribution to the global sales has increased from 12.97 percent in 2015 to 15 percent in 2017. Almost all the products have shown significant growth. The company is the only manufacturer to win five Indian Car of the Year – ICOTY Awards, and three in a row. Hyundai Verna, Creta, Elite i20, Grand i10, and i10 won the award for 2018, 2016, 2015, 2014 and 2008, respectively.
Yet, Koo is unwilling to rest on his laurels and is looking for ways to drive the company forward. Optimising resources and increasing market share was possible thanks to his diversified work experience of global markets in different assignments with Hyundai Motor Company since he joined it in 1984 in South Korea. Koo is one of the founder members of Hyundai Motor’s India operation in 1997. He left India on other assignments in 2001 and returned in 2008 to stimulate sales and marketing operations.
The numero uno status in the Indian market is too ambitious and far-fetched, but to make Hyundai the most loved and trusted brand here is realistic and within reach, he said in a recent media interaction. This goal was one of the four pledges he made when HMIL celebrated its 20th foundation day in India last year. The other three are to make Hyundai India the market leader, the modern premium brand, and a great place to work in.

New Products

To accomplish these objectives, HMIL will reach more customers by launching at least two new products every year and will expand network to connect with customers. True to these plans, the company launched the premium compact New 2018 Elite i20 and a global electric vehicle (EV) Ioniq at the recently concluded Auto Expo 2018. Elite i20 has over 400,000 customers in the world.
For the forthcoming launches the company plans to spend Rs 6,500 crore during the next three years and develop nine new models. This will start with models to be unveiled from the current calendar. The new models include two facelifts, two vehicles in the new segments and four models with full makeover and an Electric vehicle.
During this year the company plans to introduce two upgraded cars and a new ‘family-oriented’ car before the festival season begins in October. According to Koo the family-oriented car will be positioned between Eon and Grand i10. Talks are doing the rounds in the industry that the company is looking at options to name the new family-oriented car Santro, the debutante model 20 years ago. However, Koo said, “We have not yet finalised the name, only a survey for it is under way.”

Production

Since inception HMIL had invested about Rs 21,000 crore in its two plants in Irrugattukottai, about 40km southwest of Chennai. Koo is confident to touch an annual production of one million units by 2020, though there is no apparent manufacturing capacity expansion. Last year HMIL manufactured 680,000 units and this year it will be a little over seven lakh and stretchable by another 13,000 units. Next year it hopes to touch 7.5 lakhs unit and, “we will cross the one-million mark after 2020. We plan to increase the production capacity through debottlenecking and increasing per hour output. We have already increased the ‘per hour output’ to 58 units from 45 and are planning to increase it to 60,” he said.
Asked if the company has any plan to set up a greenfield facility, he said, “For such a project, we need market demand for at least another two lakh units. We will think about it after 2020.”
According to company sources, the plan under way is to increase the hourly output to 66. Production increase has been possible by replacing older machines with the latest ones, optimising space utilisation and moving from ‘preventive maintenance’ to ‘predictive maintenance.’

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