Hyundai Motor India has started to feel the effects of the global financial crisis. India's second largest passenger car maker after Maruti Suzuki, had thus far enjoyed a relatively clean run in sales during the January – October period this year, and is a shade short of hitting the production mark of 2 million cars this week since it set up shop in India 10 years ago.
Speaking to the media, on the occasion of rolling out the first batch of i20 cars for the export market, HMIL managing director H S Lheem said that his company was no exception to the international financial crisis, which he said has hit its distributors. ''We are working with them to tide over the problem,'' Lheem said.
HMIL has doubled its production capacity for cars from three lakh to six lakh, had planned a sales target of six lakh cars, which included 2.7 lakh cars as exports in 2008. Now, on account of the uncertainty, HMIL has revised its sales target downwards to 5.3 lakh cars, and expects to close the year with 5.15 lakh cars, the company said.
In 2007, HMIL's total sales had gone up by 9.2 per cent to 327,160 cars. While its domestic sales rose by 7.6 per cent to 2 lakh cars, HMIL's exports for 2007 rose 11.8 per cent to 1.26 lakh cars.
Reports suggest that sales were lacklustre this festive season, and the company does not anticipate any large recovery during 2009, even though it plans to produce over six lakh cars in 2009. Reports also suggested that HMIL will support its dealers in advertising and marketing activities.
Lheem said that HMIL did well in the first 10 months of 2008, notching up record sales of 4.07 lakh cars during the January to October 2008 period, higher by 49 per cent year on year from 2007.
HMIL's Domestic sales jumped 28 per cent against the industry average of five per cent, to 2.15 lakh cars. The company's exports also went up by an astounding 83 per cent to 1.92 lakh cars.
Lheem said HMIL did not have any problem with its inventory, with an optimum 22,000 cars in stock at the plant, and an equal number at its dealers. He said that company is working two shifts, and has no lans for any reductions in its labour force.
HMIL is also working with 100 of its suppliers, or whom 45 are from Korea, and with employees on cost saving and weight reduction initiatives.
In a statement, HMIL said that its all-new i20, revealed recently at the Paris Motor Show in October 2008, rolled off the assembly line at HMIL's Sriperumbedur plant as part of the first batch of export shipment to the European market.
Though Hyundai's 'Made in India' cars ply in all five continents, Europe is a preferred destination accounting for almost 50 per cent of the company's total exports.
The first consignment of 2,820 units of the car will be shipped to the following countries in Europe, including the United Kingdom, Germany, Greece, Austria, Croatia, Spain, Belgium, Holland and Hungary.
Commenting on the company's export performance, Lheem said, ''The all-new Hyundai i20 is set to become a best-seller in the Hyundai's European range. We are proud of the fact that within a month of its world debut, it has received such a phenomenal response. In line with Hyundai India's positioning as the global export hub for compact cars, we recently started the third shift of operations to meet the anticipated demand. Today, Hyundai cars symbolise global trends and aspirations of our buyers and stand among the very best. ''