Hyundai is considering building a second engine plant in India, according to local press reports, although no official announcement would be made.
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The expansion of engine production would support recent announcements to aggressively expand vehicle production in the country.
Nevertheless the scandal investigation in South Korea that has seen Hyundai’s chairman indicted and detained, does seem to be having an effect on overseas expansion efforts. Chairman Chung Mong-koo’s absence has already delayed plans for Kia’s new plant in Georgia and Hyundai’s new plant in the Czech Republic.
According to Wards, Hyundai would invest $US600m in a second engine and transmission plant.
Hyundai is aiming to reduce costs and raise quality with enhanced processes. Defect rates at some 34 suppliers are zero parts per million, but Hyundai wants to bring down the number for its other 60 suppliers from their current level of 100ppm, according to Wards.
The existing engine and transmission plant is described by Hyundai as being equipped with the most modern tooling and testing equipment and as one of the biggest such plants in the country.
Hyundai’s growth in India has been so phenomenal that it now plans to sell 600,000 units annually by 2008, up from an earlier target of 400,000 cars by 2010. For 2006 Hyundai is targeting domestic sales of 252,000 units and export sales of around 80,000 units.
