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Hyundai Motor eyes W1tr funding for Indian plant

By Byun Hye-jin

Published : Jan. 16, 2024 - 14:55

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Hyundai Motor India CEO Kim Un-soo (center), Devendra Fadnavis (second from left), India's deputy chief minister of Maharashtra, and other government officials and company executives pose for a photo after a business meeting on Saturday in Maharashtra, India. (Devendra Fadnavis’ X) Hyundai Motor India CEO Kim Un-soo (center), Devendra Fadnavis (second from left), India's deputy chief minister of Maharashtra, and other government officials and company executives pose for a photo after a business meeting on Saturday in Maharashtra, India. (Devendra Fadnavis’ X)

Hyundai Motor Group plans to invest an additional 70 billion rupees ($845 million) into an automotive plant owned by General Motors in Talegaon, India, according to Indian authorities on Tuesday.

According to an online post on X, formerly Twitter, uploaded by Devendra Fadnavis, deputy chief minister of the western state of Maharashtra, the Korean auto giant plans to sign a memorandum of understanding for the new funding during this week’s World Economic Forum in Davos, Switzerland.

Fadnavis added he recently met with Hyundai Motor India executives including CEO Kim Un-soo to discuss new investment plans and offer the state government’s full support.

“The company will make phased investments to upgrade the existing infrastructure and manufacturing equipment at the Talegaon plant,” said an official from Hyundai, without disclosing further details on the matter.

“India is one of the largest automotive markets that shows huge potential. It is showing fast-growing demand for car models ranging from compact and small cars to sport utility vehicles,” the official added.

The commercial operation will start at the Talegaon plant in 2025, after making upgrades to the manufacturing facilities, according to Hyundai.

Last year, the carmaker bought GM’s factory, which ceased operations for years after the US carmaker withdrew from India in 2017. The size of the deal was not made public.

Hyundai and its smaller sibling Kia currently operate two factories in Chennai and one in Anantapur, respectively. Adding the 130,000 units of annual production capacity of the newly acquired plant, the carmaker is projected to produce more than 1.32 million cars in India.

Hyundai is also planning to invest 40 billion rupees in the burgeoning market for the next four years in producing six electric vehicle models and expanding research, development and infrastructure for EVs. Kia will inject 20 billion rupees in battery-powered cars by 2027.

Industry sources say India is a budding market for clean mobility. The government laid out an electrification strategy -- to sell 30 percent of cars that run on batteries by 2030.

Last year, Hyundai Motor and Kia sold a combined 857,111 vehicles in India, a 6.2 percent jump from 2022.