Indicating support to Hyundai Motor Group’s decision to set up a third factory in India at a time when the NDA government is promoting the 'Make In India' initiative, commerce and industry minister Nirmala Sitharaman on Friday asked the South Korean automobile major not to have any hesitation in establishing a new plant anywhere in the country.
Speaking at a function on ‘Korea–India Industry and Infrastructure Forum’ organised by Indian industry body FICCI and Korea Trade Investment Promotion Agency, Ms. Sitharaman said, "I do not think there are enough reasons for you (Hyundai) to think more about it (setting up a third factory in India). You (Hyundai) should not delay it. It's time that you set it up and this is a good time for Hyundai to announce this.”
Hyundai, which is India’s second largest automobile manufacturer, currently has two plants at Sriperumbudur near Chennai in Tamil Nadu. Queried on the details of the issue, Ms. Sitharaman said, “The decision is apparently with the Hyundai leadership and I would only suggest that since they have two successful plants here, setting up of a third should not be an issue. Moreover with this (NDA) government is looking forward to pushing the Make In India initiative.”
Hyundai Motor India Ltd (HMIL) Managing Director and Chief Executive Officer Young Key Koo had reportedly said in February that the company was not considering setting up a new manufacturing plant as it had sufficient capacity for the next three years, adding that the annual capacity of 6.8 lakh units could be expanded to 7.2 lakh units. HMIL senior vice-president, Sales and Marketing, Rakesh Srivastava had reportedly said in July 2015 that the company was awaiting greater clarity on issues including land acquisition and Goods and Services Tax before taking a final decision on the third plant.
Hyundai Motor Group chairman, Chung Mong-koo had even reportedly met Prime Minister Narendra Modi in Seoul to discuss, among other things, the issue of setting up a new plant in India. The sites being considered for the new plant are in Gujarat, Andhra Pradesh and Rajasthan.
