For Hyundai, India won't become 6 million unit market by 2021

Hyundai India CEO YK Koo said in a recent media interaction that a new production facility won’t be necessary as he is expecting the Indian auto market to grow only by 5-7% annually for the next 5 years. He stated that though he is positive about Hyundai’s medium-term prospects, India will not become a 6 million unit market by 2021.

Almost all other automakers are confident about the domestic market’s potential to reach that target which will put the nation as the third largest car market in the world. His skepticism arises from discouraging factors like consecutive draught years that affected the rural market, companies holding back on investments, and a banking system which is marred by rise in bad loans.

However, of late, new products, low oil prices, and reduced interest rates have been fueling growth for automakers including Hyundai India which posted a double-digit growth of 16% last year, thanks to the Creta. Mr. Koo also stated that once the market reaches 6 million units a year, he will approach his HQ with a request for a third production plant in India.

The twin facilities located within Hyundai India’s Irungattukottai campus is running at near full capacity but is claimed to have enough scalability to accommodate the growth in the next 3-5 years.

This article first appeared in Rushlane.com