NEW DELHI — Hyundai Motor Group will invest about $15.5 billion (20.8 trillion won) in India over seven years starting this year. The money will go toward building new plants, strengthening research and development capabilities and improving the competitiveness of local supply chains, and the group will establish a dedicated investment company to carry out the spending in a systematic way. The plan positions India — the world's third-largest auto market and a key country in the Global South — as a base for future growth and for expansion into emerging markets.
Euisun Chung, executive chairman of Hyundai Motor (005380) Group, outlined the medium- to long-term investment plan when he met Prime Minister Narendra Modi at the prime minister's residence in New Delhi on the 13th. "India is a strategic country that will drive Hyundai Motor Group's future growth and its expansion into emerging markets," Chung said. "We are planning investments of about $15.5 billion over seven years starting this year."
"Hyundai Motor Group has grown together with India over the past 30 years, and with the Pune plant now running we have secured annual production capacity of 1.4 million vehicles," Chung said. "On the basis of stable production, we will respond actively to the continued growth of India's auto market and expand exports to emerging markets."
In R&D, Hyundai Motor Group plans to expand local research infrastructure and recruit top talent to develop and supply products and technologies tailored to India more quickly. In future mobility, it will deepen cooperation with local companies and startups. The group has already completed a prototype of an electric three-wheeler (i3W) with India's TVS Motor Company and is working toward commercialization by the end of 2027. It is also exploring new business opportunities in auto financing, electric vehicle charging infrastructure and end-of-life vehicle recycling.
The India investment company being set up to pursue the medium- to long-term investments efficiently will identify, coordinate and execute group-level future investment projects. It will also serve as a platform for finding strong partners through strategic investments in local companies. The aim is to improve the group's ability to respond to shifts in local policy and the industrial environment, and to strengthen its business foundation in India over the long term.
Hyundai Motor Group's focus on India reflects the market's growth potential. India has surpassed China as the world's most populous country, with about 1.47 billion people, and the Organisation for Economic Co-operation and Development projected in September that its economy would grow 7.1% this year. The International Monetary Fund said this month that India would grow 7% both this year and next, the highest rate among major economies. The passenger car market, which accounts for more than 80% of total auto sales, is expected to expand nearly 15% to 5.25 million units this year from 4.57 million last year.
Because imported finished vehicles face tariffs of 70% to 110% in India, local production is essential. Its proximity to the Middle East and Africa and low manufacturing costs also make it valuable as an export hub for emerging markets. Hyundai Motor Group first established Hyundai Motor's India unit in 1996 and now operates Hyundai's first and second plants in Chennai, a third Hyundai plant in Pune and a Kia (000270) plant in Anantapur. Last year it sold a combined 852,164 vehicles in India — 571,878 Hyundai vehicles and 280,286 Kia vehicles — for an 18.7% market share, ranking second.
Chung maintains close ties with Modi, and the meeting was their eighth. In April, Chung joined the business delegation accompanying President Lee Jae-myung on a state visit to India and attended a luncheon hosted by Modi. He also held a separate meeting with Modi a day before the listing of Hyundai Motor's India unit in 2024. The two have met on other occasions as well, including Modi's 2015 visit to South Korea, the Korea-India Business Summit and India's Move Mobility Summit.
Hyundai Motor Group is also active in community programs in India. One example is the Samarth campaign, which supports training for athletes with disabilities and produces videos aimed at changing public perceptions. Hyundai Motor's India unit plans to establish HATS, a vocational training school in Chennai, Tamil Nadu, that will train about 13,000 people a year. Cumulative community investment funds in India from major affiliates including Hyundai Motor, Kia and Hyundai Mobis totaled about $110 million (164 billion won) from 2016 through 2025.