India emerges as Hyundai Motor, Kia’s largest production hub

Hyundai Motor Co. and Kia Corp. headquarters in Seoul [Courtesy of Hyundai Motor Group]

India is expected to soon overtake China as the largest overseas production base for South Korea’s Hyundai Motor Group as the combined cumulative production of Hyundai Motor Co. and Kia Corp. cars in the country is forecast to surpass that in China by March next year.

According to Hyundai Motor Group on Tuesday, a total of 359,159 Hyundai Motor and Kia cars were produced in India between January and April, the largest cumulative figure among Hyundai Motor Group’s overseas production sites.

India surpassed 318,018 units in Europe, which includes Slovakia and the Czech Republic. The two regions were followed by the U.S. (247,630 units) and Latin America (144,851 units). Production in China stood at 97,400 units.

In terms of production capacity, China remained the top country capable of producing the largest number of Hyundai Motor Group vehicles, excluding the suspended Chongqing plant of Hyundai Motor and the Yancheng Factory 1 of Kia.

Even without these facilities, Hyundai Motor Group’s production capacity in China still stands at 1.86 million units (1.11 million for Hyundai and 0.75 million for Kia) as of the end of last year.

India follows closely with 1.12 million units, Europe 1.06 million units, and the U.S. 700,000 units.

Despite the annual production capacity difference of over 700,000 units, Hyundai and Kia vehicles continue to enjoy significant popularity in India.

“If the current trend continues, it is expected that India will surpass China and become the leading overseas production hub by March next year,” said an unnamed Hyundai Motor official.

It will be the first time in 11 years since 2013 that Hyundai Motor Group’s cumulative production in India will surpass that in China. Hyundai Motor’s overseas production began in India in 1998, earlier than 2002 in China.

Due to factors such as the THAAD missile defense system issue and the failure of its market entry strategy, Hyundai Motor Group’s car sales in China have been sluggish over the past several years.

The robust production system based on unwavering popularity for Hyundai and Kia brands, on the other hand, continued in India.

Hyundai Motor sales in India this year are expected to exceed 600,000 units, the highest since 1998.

The combined market share of Hyundai Motor and Kia cars in India stands at 21.7 percent between January and April this year, second only to Maruti, India’s central government-owned enterprise, and Maruti Suzuki, a joint venture between India and Japan, with about 40 percent.

Hyundai Motor Group plans to introduce new vehicles this year to fend off Tata Motors and reduce the gap with Maruti Suzuki.