Young Key Koo,

MD of Hyundai Mo­tor In­dia

Business Sphere - - CONTENTS - By Our Cor­re­spon­dent

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.

Young Key Koo, MD of Hyundai Mo­tor In­dia

Matt Le­vatich, Pres­i­dent and Chief ex­ec­u­tive of­fi­cer of Har­ley-David­son Inc.

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