Hyundai Motor Co. has announced its plans to invest 70 billion rupees ($845 million) in preparing its second plant in India for operations. This comes after the South Korean carmaker purchased a dormant factory from General Motors Co. The investment agreement will be signed with the western state of Maharashtra at the World Economic Forum summit in Davos, Switzerland. Deputy Chief Minister Devendra Fadnavis confirmed the news in a post on X (formerly known as Twitter).
Acquiring the General Motors factory in Talegaon, which remained unused for years after the US company's exit from India, positions Hyundai as the second-largest carmaker in the country. With a focus on meeting the growing demand for SUVs that are suitable for India's tumultuous road conditions, Hyundai aims to cater to the rising middle-class population aspiring to own larger vehicles.
To achieve its goals, Hyundai plans to make phased investments in upgrading the existing infrastructure and manufacturing equipment at the Talegaon plant. This move will expand the company's production capacity and bolster its presence in the Indian market.
In addition, Hyundai is also venturing into the electric vehicle (EV) segment in India. Over the next eight years, the automaker plans to invest 200 billion rupees in new electric models, a battery pack assembly unit, and charging stations along major highways in Tamil Nadu. This investment showcases Hyundai's commitment to sustainable mobility in the country.
Presently, Hyundai operates a plant in Tamil Nadu with an annual production capacity of 825,000 vehicles. The company's efforts seem to be paying off as its India sales grew by 10% in the previous month, reaching 42,750 units, according to the Society of Indian Automobile Manufacturers.
Hyundai's significant investment in its second Indian plant, combined with its foray into the EV segment, underscores the company's commitment to the Indian market. By capitalizing on the demand for SUVs and recognizing the increasing interest in electric mobility, Hyundai aims to solidify its position as a leading automotive manufacturer in India while catering to the evolving needs of Indian consumers.