Be it any industry, the customer is the boss. It is the same with the automotive industry too. The demand for cars is increasing by the day and Hyundai Motors India Ltd wants to keep pace with the demand. The i20 is in great demand and Hyundai is looking to shift part of the production load.The Korean auto maker is finding it difficult to manage the growing domestic demand and wants to reduce the waiting periods for its popular models. During the second half of this year, part of its export-related production will therefore be shifted to Turkey. The premium i20 hatchback is going to be the Turkey-produced product.
Hyundai will be gaining a lot from this shift. The three to four week waiting period looks to be decreasing and this would certainly lead to better customer satisfaction. The move will also result in a shift in the share of production capacity at its facilities. It is going to be more towards domestic production as compared to exports. Wait, there’s something more. Currently, the car maker’s export focus has been on the European market. Post June, Hyundai can shift its focus to other markets like New Zealand and Australia.
Must say that the step Hyundai plans to take is an intelligent one. The company’s domestic sales projection shows a growth of 9-11 per cent in 2011. Last year, as it sold 5.6 lakh units, it was close to exhausting its existing capacity of 6 lakh across the two facilities in Chennai. Whoa! Luckily, it didn’t. The Turkey shift is definitely going to help Hyundai ease out a little. On the other hand, it is going to enhance domestic sales and help the company balance its growth target.
A small amount of the i20 production is going to be shifted to Turkey. Only the three-door version will be produced in Turkey. The i20’s five-door variant will continue production here. Hyundai will send them out as completely knocked down kits. As of now, the company has maintained a 50:50 split between exports and domestic sales. Very soon, this ratio will be a little heavier on the domestic sales side. It is only with the perfect volumes of production that Hyundai will be able to maintain growth domestically.
Shifting a part of the premium hatchback production work to Turkey would clear up a space of 50,000 units a year in its facilities in India. Not just that. It may also enhance competence to add additional 30,000-35,000 units a year to the already existing 6 lakh capacity. This addition, however, is going to be made use of in domestic sales.
Right now, Hyundai’s production is around 50,000 a month at three shifts. During the second half of the year, this is going to go high. With the steadiness of the various shops and improvisation to make the systems more efficient, annual capacity can be expanded to around 6.30-6.35 lakh. Looks like there is enough room for Hyundai to add capacity.
Labels: Car-Production, Hyundai, Hyundai-Domestic-Sales, Hyundai-Exports, Hyundai-Motors-India-Ltd, Hyundai-Sales, i20, i20-Production, i20-production-in-Turkey
