Young Key Koo,
MD of Hyundai Motor India
Increased protectionism around the world has turned into a blessing in disguise for capacity-starved Hyundai Motor India as it gets ready to launch new massmarket products. Due to increased tariff for fully built vehicles in export markets like Vietnam, the Philippines, Ecuador and Algeria, Hyundai is planning to export more of its cars in the knocked-down form. The exercise is likely to release a capacity of 50,000 units a year for Hyundai before it launches small car AH2 — which may be named after its most successful product in India, the Santro — and a compact SUV launch to take on Maruti’s Vitara Brezza. The company is expecting that this along with efficiency and automation improvement will add almost 1 lakh units to its capacity. This should help it ensure adequate supply for the domestic market ahead of big volume launches. Hyundai Motor India has been operating at more than 98% capacity for the best part of the last 4-5 years. Young Key Koo, MD of Hyundai Motor India that the current capacity at its plant in Chennai was adequate for it to meet domestic demand till 2020. Any plans for new plant will only be discussed post 2020. “We are very aggressive with the sub-4 meter vehicle segment in India as it accounts for a large part of the Indian market. The coming product launches have potential to add a monthly volume of 10,000-15,000 units in the coming year and hence we are making necessary arrangement to cater to the increased demand,” Koo said. Hyundai Motor India used to export 45-50% of its total production five years back. That came down to 25% at the end of 2017. It is likely to come down to 15% in the coming years, as it makes way for more domestic volumes. Between now and 2020, Hyundai will be launching eight products including two all-new vehicles and an electric SUV. These will entail an investment of close to $1 billion. Hyundai recently spent significant time and resources to upgrade the existing manufacturing set up with increasing automation and up skilling employees, vendors and dealers.
With India in focus, Harley Davidson to come out with 250-500 cc bike
Iconic US superbike maker HarleyDavidson is planning to launch a mid-size motorcycle in the 250-500 cc range for emerging markets as it eyes major gains in India and plots to challenge Royal Enfield’s leadership position. Harley-Davidson will be addressing this fast-growing segment through a strategic alliance with a manufacturer in Asia after a tie-up between TVS and BMW and one between Bajaj Auto and Triumph Motorcycles. The identity of the manufacturer could not be ascertained and the global statement does not name anybody. While the vehicle displacement will be in the heart of Royal Enfield’s target market, the US bike maker may price its vehicle at a higher end. It may even offer an upgrade option to thousands of Royal Enfield owners. Royal Enfield is also getting ready with its own twin cylinder 650 cc bike for a launch later in the year. Announcing new mid-term plan till
2027 named ‘More Roads to HarleyDavidson’, the US giant said it is developing small-displacement (250500 cc) bike for Asia’s emerging markets through a strategic tie-up with a manufacturer in Asia. “This new product and broader distribution is intended to fuel Harley-Davidson’s customer access and growth in India, one of the largest, fastest growing markets in the world, and other Asia markets,” the company said in a statement. Harley-Davidson believes that consumer spending on discretionary and premium products is reaching critical mass in China, India and Southeast Asia. The company spokesperson told ET that India’s 250-500cc motorcycle segment is expected to grow at more than 25% annually through 2021, which presented a big potential growth opportunity. The 250-500 cc motorcycle market in India grew to 8.33 lakh units at the end of FY18 accounting for 6.6% of the overall motorcycle market. Royal Enfield took the lion's share in the segment with a market share of over 95%. The Harley-Davidson spokesperson declined to share details on the launch of this smaller displacement motorcycle or who would be its alliance partner in Asia or whether it is from India. “We anticipate leveraging our global manufacturing footprint to bring these future products to market globally. Specific details on which products will be manufactured at which locations is still to be determined,” he told ET. Given the fact that the likes of BMW and Triumph also sees India as a key export base for future, it makes sense for Harley-Davidson to deepen its manufacturing footprint here from the largely CKD base and use it for exports, say experts. The highlights of the plan includes new touring and cruiser motorcycles, new middle-weight modular platform 5001250 cc segment, more accessible and small displacement bikes including an all-electric motorcycle Livewire, which will hit the market in 2019. “Alongside our existing loyal riders, we will lead the next revolution of two-wheeled freedom to inspire future riders, who have yet to even think about the thrill of riding,” said Matt Levatich, president and chief executive officer of HarleyDavidson Inc. “We expect this plan will result in an engaged, expanded Harley-Davidson community with a more diverse rider base, along with industry-leading margins and cash flow.” Harley-Davidson plans to offer its most comprehensive lineup of motorcycles, competing in many of the largest and fastest growing segments with a full portfolio across a spectrum of price points, power sources, displacements, riding styles and global markets, the company said in a statement.
GFG Alliance appoints former Vedanta CEO Mahendra Singh Mehta as country head for India
UK-based GFG Alliance which will soon be making its foray into the Indian auto components and steel markets has appointed former Vedanta and Reliance Infrastructure NSE 0.90 % CEO Mahendra Singh Mehta to head its India operations. This follows the approvals granted by the insolvency tribunal to group company Liberty House to acquire two distressed assets, namely Amtek Auto and Adhunik Metaliks NSE 0.00 % under the Insolvency and Bankruptcy Code, 2016. GFG, whose business spans metal manufacturing, engineering, energy, financial services and property will also soon unveil the executive lead teams in India for each of its business divisions drawing senior professionals from across industries. Mehta has more than thirty six years of experience in operations, strategy and business turnaround in sectors spanning steel, non-ferrous metals, mining, power generation and distribution, infrastructure NSE -1.39 % and cement. The metals and manufacturing major that has turned around many stressed steel companies in the UK and Australia also plans to announce an advisory board for GFG India. The board will provide governance and strategic advice to the group and its executives in the country. "Following GFG’s successes in so many other parts of the world, I am very excited to bring our pioneering business model to my own motherland and I’m confident that the appointment of Mr. Mehta and many other respected senior executives and advisors will enable us to establish a significant base in India capable of sustained long term growth," executive chairman of the GFG Alliance, Sanjeev Gupta said in a release. Gupta's Liberty House has also put in a bid for Bhushan Power and Steel along with Tata Steel NSE 1.82 % and with JSW Steel revising its initial bid last week. The final verdict on the asset is still awaited.