Hyundai to roll out car priced under Rs 2 lakh?

Hyundai Motors India Limited, the second largest automotive company in the country, will use its research and development centre at Hyderabad to develop new cars for the Indian and overseas markets.

HMIL president Ashok Jha did not rule out the possibility of research on developing low-end cars priced between Rs 1 lakh and Rs 2 lakh.

The R&D unit will come up with an investment of $40 million over 15 acres and will be operational in a year's time.

It had 400 R&D staff now and when fully functional, the centre will have staff strength of 1000, said Jha.

This apart, the company will scale up facilities at its Chennai plant with an investment of $528 million, to produce 3 lakh more cars per year.

The new Hyundai i10 will be manufactured from this facility at Chennai which is to be operational by the end of this year. The Chennai plant, spread over 525 acres, currently had capacity of manufacturing 3 lakh cars per year.

Only one-fourth of the total area of the plant is now being utilised, said a company spokesperson.

A new engine and transmission unit costing $263 million, will also come up at the Chennai plant that will have a capacity of producing 1 lakh engines. The unit will be operational by mid 2008.

With these additional facilities, the company's production capacity will reach 6 lakh cars per year. The Hyundai i10 would number 2.2 lakh cars next year, 50 per cent of which will be for export.

The major markets for the i10 will be western Europe, Latin America and Africa, said Jha. The i10 was 94 per cent indigenous in terms of components. HMIL plans to roll out 3 lakh i10s from 2009.

The i10 was designed for the mid segment compact cars segment. The growth rate of this segment is 54 per cent. The i10 was expected to help increase its market share in eastern India, now at 8 per cent, to 23 per cent in a couple of years.

The company will increase its dealer network from 183 in January 2007 to an estimated 250 by the end of this year.