Hyundai Motor Group will invest about $15.5 billion (20.8 trillion won) in India over the seven years from this year through 2032. The money will go toward building new plants, strengthening research and development capabilities and improving the competitiveness of its local supply chain, and the group will set up a dedicated investment company in India to carry out the spending in a systematic way. Hyundai Motor (005380) also held a completion ceremony on the 14th local time for its new Pune plant, which has annual capacity of 170,000 vehicles, marking 30 years since it entered India and opening a new growth base.
Euisun Chung, executive chairman of Hyundai Motor Group, outlined the medium- to long-term investment plan on the 13th in a one-on-one meeting with Prime Minister Narendra Modi at the prime minister's residence in New Delhi. "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." He added: "With the Pune plant in operation, we have secured annual production capacity of 1.4 million vehicles in India. On the back of stable production, we will respond actively to the continued growth of the Indian auto market and expand exports to emerging markets." It was the eighth meeting between Chung and Modi.
Pune Plant Completed: 'Opening a New Chapter in India'
The ceremony on the 14th in Talegaon, Maharashtra, drew Korean and Indian government and political figures, including Maharashtra Chief Minister Devendra Fadnavis, federal lower house member Shrirang Appa Barne and Lee Sung-ho, South Korea's ambassador to India. Hyundai Motor Group was represented by core executives including Chung, Vice Chairman Jaehoon Chang, President Jose Munoz and Tarun Garg, chief executive of Hyundai Motor India (HMIL).
"India, which we first entered 30 years ago, has become a core pillar of Hyundai Motor's global growth," Chung said. "The completion ceremony for the Pune plant will mark the opening of a new chapter for Hyundai Motor in India." He added: "We are now moving beyond 'Make in India' to 'Design in India' and 'Innovate in India.' We will invest, innovate and grow together with India."
The new Pune plant is a former General Motors facility that had been left idle after GM withdrew from the Indian market, and which Hyundai Motor acquired and rebuilt as a smart manufacturing base. About 1 trillion won was spent on the conversion, excluding the acquisition price. It is Hyundai Motor's third production base in India after its two Chennai plants, and houses not only a vehicle assembly plant but also an engine plant, a test track and employee training facilities. The site covers 1.2 square kilometers, or about 1.19 million square meters, equivalent to 166 soccer fields.
Since the fourth quarter of last year, the Pune plant has been building the second-generation Venue, a small SUV developed as a strategic model for the local market, on annual capacity of 170,000 units. Capacity will rise to 250,000 units in two years and to 320,000 units by 2030, and the plant will eventually be set up as a flexible multi-model facility that can also build hybrid vehicles.
India Capacity Nears One Million; Chennai Shifts to Electric Vehicles
With the Pune plant now running, Hyundai Motor has secured annual capacity of close to one million vehicles in India. The two Chennai plants have combined capacity of 824,000 units. Adding Kia's (000270) Anantapur plant, which can build 431,000 units, Hyundai Motor Group's capacity in India comes to 1.425 million vehicles a year as of this year. Once the first phase of expansion at the Pune plant is completed in 2028, the group's India production system will grow to about 1.5 million vehicles a year.
With Venue production handed to Pune, the existing Chennai plant plans to accelerate its shift to electric vehicles. The Indian government is offering support measures such as production-linked incentives (PLI) as it targets raising EVs to 30% of new vehicle sales by 2030. In addition to the Ioniq 5 and Creta Electric now on sale, Hyundai Motor will launch a new small electric SUV developed as a strategic model for the local market in the first quarter of next year.
A Growing Market, but a Falling Share
Hyundai Motor Group is pouring resources into India because of the market's growth potential. India has overtaken China as the world's most populous nation, with about 1.47 billion people, and is a major economy; the OECD in September forecast growth of 7.1% this year. The International Monetary Fund this month also raised its forecast for India's growth this year to 7.0%, from 6.4% in July. The passenger car market, which accounts for more than 80% of the total auto market, is expected to expand nearly 15% to 5.25 million units this year from 4.57 million last year. Because imported vehicles face tariffs of 70% to 110%, a local production base is essential, and India's proximity to the Middle East and Africa, along with low manufacturing costs, also make it valuable as an export hub for emerging markets.
Hyundai Motor has sold a cumulative 9,884,960 vehicles in India from 1998 through September this year and is likely to pass the 10 million mark within the year. Its standing in the market, however, is weaker than before. According to reports citing data from the Society of Indian Automobile Manufacturers (SIAM), Hyundai Motor sold 471,724 vehicles in India's passenger car market in the first nine months of this year, placing fourth with a share of 11.8%. Sales rose 10.9% from a year earlier but trailed the market's overall growth of 22.6%, pushing its share down 1.2 percentage points from 13.0%. Maruti Suzuki ranked first with 39.5%, followed by Tata Motors with 14.4% and Mahindra with 13.5%. Last year, Hyundai Motor and Kia sold a combined 852,164 vehicles — 571,878 for Hyundai Motor and 280,286 for Kia — for a combined share of 18.7%.
Spending on R&D, Parts and New Businesses; Investment Company to Be Set Up
In research and development, Hyundai Motor Group will expand its local R&D infrastructure and recruit talent to speed up the development of products and technologies tailored to India. About $700 million will go toward R&D. The group will train personnel through its technology institute in India and raise the share of locally sourced parts through joint investments with local suppliers. Newly launched models are to be fitted with Level 2+ driver assistance technology adapted for local conditions.
In future mobility, the group is strengthening cooperation with local companies and startups. Hyundai Motor Group has completed prototype development 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 broadening into auto financing, EV charging infrastructure and vehicle recycling. The new India investment company will identify, coordinate and execute group-level future investment projects, and will also serve as a platform for finding strong suppliers through strategic investments in local partners.
Korean Suppliers in India Also Set to Benefit
Hyundai Motor Group's expanded investment in India is expected to benefit Korean suppliers as well. Some 120 Korean parts makers have moved into India alongside Hyundai Motor and Kia. Auto parts exports to India came to $841.09 million (1.126 trillion won) last year, the fifth-largest category in trade with the country. On growing together with suppliers, Chung said: "Many Korean suppliers are now in India. What the Indian side is asking for is a higher share of local content, so we will put our heads together to raise localization and find ways for our suppliers to succeed along with us."
