Hyundai Motor is reportedly considering raising its small car output in India in order to cut costs but has no plans to shift production lines out of South Korea.
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The automaker is expected to focus on higher-end vehicles, which generate bigger margins, at home where the company faces higher labour costs and to produce cheaper models in its overseas units, such as India and China, analysts have told Reuters.
South Korean newspaper Chosun Ilbo, citing a company official, reportedly said on Tuesday Hyundai is mulling shifting [more] production of the compact Getz to India by the end of 2007. The company will use the line to produce all of the model for exports, according to the report.
“We are considering the subject in a bid to lift competitiveness, although nothing has been decided yet,” Hyundai said in a statement cited by the news agency. “Even if we move ahead with the plan, we will not move a production line, but may adjust production volumes.”
Hyundai produced 200,903 Getz cars in South Korea and 15,151 in India last year, Reuters noted.
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By GlobalDataHyundai, which has a 300,000-unit-a-year car factory in India is also building another factory there, set to start operations in October 2007 and to build a new follow-up model to the Santro small car, the company’s flagship product in India, the report said.
Hyundai and Kia plan to have around half their output abroad within the next five years. Last year they made 2.7 million vehicles at home and 750,000 abroad, Reuters added.
