Hyundai Plans Below Santro Style Car

Call it the Nano effect, but the lure for cheap compact cars is growing by the day. Hyundai Motors is working on a new compact car that would be priced lower than the ‘Santro’ and could be rolled out within three years. The South Korean auto major, that inaugurated its second manufacturing plant here, said the new car would be smaller than the Santro and sport a lower price point and will be developed keeping in mind the global market. However, company’s India president Ashok Jha said the project was in an initial stage at the moment and refused to comment on specific queries on the new offering, saying it was "too early". Currently the cheapest version of the Santro is available at an ex-showroom price of Rs 2.7 lakh and with an eye on a low-priced car, Hyundai may possibly look at a price point close to Rs 2 lakh. Jha said the company’s upcoming research and development centre at Hyderabad, that would focus on developing low-cost technologies, would be a contributor to the project. However, when asked specifically on the Nano and whether it could pose a threat to the company’s sales, he said this could be ascertained only when the Tata’s budget car is launched in the market. Hyundai’s current capacity in India is about 3 lakh units and the new plant will add a similar capacity, taking up the total capacity to 6 lakh units. The company is pumping in an additional Rs 4000 crore-plus in India by 2013 over and above the Rs 3372 crore it has invested so far. Hyundai India senior V-P Arvind Saxena said compact cars would be a major focus for the company in the coming years. "It is the largestsegment in the Indian market with a share of 74% and we will focus on it aggressively," he said. Small cars have been the biggest volume churner for Hyundai in India through its Santro and now with the i-10. However, it has not been able to make much of an impact in sedan segment where only ‘Accent’ has given it some success. Apart from the domestic market, it is also using India as a hub for manufacture of small cars that it exports to over 70 countries, including Europe, Africa and Latin America. The company plans to export as much as 50% of the production from India and said it is working on a plan to get a rail connectivity to transport its cars from the factory to the Chennai port, to make the process more efficient and safe. "RITES had done a feasibility study for this and if approved, it would be a tri-partite project including the railways, Chennai port and the Tamil Nadu government," the officials said.