Hyundai Motor Group Bets $15.5 Billion on India Ambitions

Hyundai Motor Group Chairman Chung Eui-sun (left) meets with Prime Minister Narendra Modi at the Prime Minister’s residence in New Delhi, India, on Oct. 13 (local time). (Photo courtesy of Hyundai Motor Group) Hyundai Motor Group Chairman Euisun Chung announced a large-scale investment plan amounting to about $15.5 billion over seven years, marking his sixth anniversary in office. This is interpreted as a strategy to simultaneously grow domestic response and exports to emerging countries by expanding production and research and development bases in India, which has great growth potential amid global trade uncertainty and fierce offensives by Chinese companies. Chairman Chung met with Prime Minister Narendra Modi at the Prime Minister’s residence in New Delhi, India, on Oct. 13 (local time) and explained this mid- to long-term growth strategy. He said, “We have secured an annual production system of 1.4 million units (including Kia) through the operation of the Pune plant,” and added, “We will respond to the growth of the Indian automobile market and expand exports to emerging countries.” Behind Hyundai Motor Group’s expansion of investment in India lies its strategic value as a huge domestic market and export hub. India is evaluated as having great growth potential, as its annual passenger car sales volume is 4.57 million units (in 2025), making it the world’s third-largest market following China and the United States on an individual country basis, and its vehicle penetration rate is low compared to its population of about 1.47 billion people. The need for local production is also significant. India imposes a 70% to 110% tariff on imported finished cars, so local production bases must be established to secure price competitiveness. In addition, it is close to emerging markets such as the Middle East and Africa, making it advantageous to use as an export hub, and competitiveness can also be secured in terms of manufacturing costs. Hyundai Motor and Kia, which entered the Indian market early, sold a total of 852,164 units in India last year, including 571,878 units for Hyundai Motor and 280,286 units for Kia, recording a market share of 18.7%. A day later, on Oct. 14 (local time), Chairman Chung also attended the completion ceremony of the new Pune plant in Talegaon, Maharashtra, in midwestern India. The Pune plant is Hyundai Motor’s new Indian production and export base, rebuilt as a smart manufacturing hub after acquiring the former General Motors (GM) plant in 2023, which stopped operation right after the COVID-19 pandemic. It is also Hyundai Motor’s third production base in India, following the first and second Chennai plants. The current annual production capacity is 170,000 units, and there is a plan to gradually expand it to 250,000 units in 2028 and 320,000 units in 2030. The first vehicle model produced at the Pune plant is the compact sports utility vehicle (SUV) ‘All-New Venue.’ It will not only be sold domestically in India but also exported to about 30 countries, including Mexico, Chile, South Africa, and Saudi Arabia. Smart manufacturing technologies, such as an artificial intelligence (AI)-based body crack detection system and about 200 industrial robots, were also introduced. In the future, the production vehicle models will be expanded to include hybrid cars to establish a multi-vehicle flexible production system. With the operation of the Pune plant, Hyundai Motor has secured an annual production capacity of about 1 million units in India, combined with the first and second Chennai plants. By 2030, when Pune’s production capacity increases to 320,000 units, the plan is to raise the export portion of Hyundai Motor India from the current approximately 25% to 30%. If the production of the Venue is distributed to Pune, there will be room for the Chennai plant to transition to electric vehicles. In addition to the currently selling Ioniq 5 and Creta Electric, Hyundai Motor plans to launch a compact electric SUV targeting the Indian market in the first quarter of next year. This investment plan in India does not stop at expanding production facilities. Hyundai Motor Group plans to invest in strengthening its research and development (R&D) capabilities and local parts supply chain, as well as discovering future new technologies and new businesses from 2026 to 2032. It is also developing an electric three-wheeler with the local two-wheeler company TVS, aiming for commercialization at the end of 2027. The establishment of a specialized investment corporation in India to coordinate and execute investments at the group level is also being pursued. The expansion of Hyundai Motor Group’s production base in India is expected to lead to local business opportunities for domestic parts suppliers. There are about 120 domestic parts companies that have entered India along with Hyundai Motor and Kia. The number increased from 68 in 2011, when only the Hyundai Motor Chennai plant was operated, to 84 in 2019, after the construction of the Kia Anantapur plant, and has expanded to about 120 with the completion of the Pune plant this time. Among them, Sungwoo Hitech, which produces body parts, operates plants in three locations, including Chennai, Anantapur, and Pune, and increased its local sales by 54.6% from 345.8 billion won in 2019 to 534.6 billion won in 2025. Additional sales expansion is also expected when the Pune plant goes into full operation. This day marks the sixth anniversary of Chairman Chung taking the position of Hyundai Motor Group Chairman. Under the leadership of Chairman Chung, who took office on October 14, 2020, Hyundai Motor Group rose to third place in global finished car sales in 2022 and has maintained its status as one of the ‘Global Big 3’ for four consecutive years until last year. While growing electrification and high value-added vehicle models and expanding its business areas into autonomous driving and robotics, the investment in India is interpreted as a move to expand the group’s growth base into emerging markets. At the completion ceremony of the Pune plant, Chairman Chung stated, “Since we first entered India 30 years ago, we have strived to earn the trust of local customers, and since the launch of our first local model, the Santro, India has become a core pillar in Hyundai Motor’s global growth process,” adding, “The completion of this Pune plant will serve as a venue for Hyundai Motor to open a new chapter locally in India.”