Home / Auto News / Auto Expo 2020: Hyundai sets sights on robust supply network to close gap with Maruti

GREATER NOIDA : Hyundai Motor India Ltd, the country’s second-largest vehicle maker, has started working with suppliers to establish a robust supply chain network and increase localization of parts for eco-friendly vehicles, as part of efforts to take a leadership position in the electric vehicle (EV) segment in the country.

The company has an internal combustion engine vehicle production base in Tamil Nadu and is trying to set up a similar ecosystem for its upcoming low-cost EV.

“In case of the Kona electric vehicle, the volume is not that big that we can find a local partner who can invest (in such limited volumes). It is very difficult as the volume is very small. In case of mass market electric vehicles, we will make the vehicle based on all localized parts and components from local partners," S.S. Kim, managing director and president, Hyundai Motor India, said in an interview.

“Even today I spent almost one hour discussing with our component partners for electric vehicles about how we can collaborate with each other and approach the India market," he said.

The Kona became the first long-range EV in India when it went on sale in July 2019 . The company aims to launch a low-cost EV on its so-called Smart EV platform, which is currently being developed at its headquarters in South Korea.

The Union budget proposed to raise customs duty on import of EVs across categories, to encourage automakers to develop and manufacture EVs in India. The increase in basic customs duty is 5-30 percentage points across the EV segment and comes against the backdrop of Chinese manufacturers dumping low-quality battery packs for EVs in India. These measures could result in an increase in the prices of existing electric buses and passenger vehicles sold in India. Hyundai, though, has decided to absorb the increase in cost of the vehicles and not pass it on to customers to create a market for such zero emission vehicles.

“By localizing more and optimizing our process, we will absorb the cost in any case. If they allow us more time, it would be the best scenario for all us and not only Hyundai. We fully understand the government’s situation and will follow the guidelines," Kim said. “The ecosystem is not ready for EV infrastructure and suppliers are not mature in the market. As an OEM, we will still do our best to absorb the cost."

Hyundai aims to narrow the gap with rival Maruti Suzuki, the country’s largest carmaker, by expanding its portfolio of sport utility vehicles in India.

As buyers’ preference shifts towards UVs, Hyundai’s portfolio in the segment will comprise four vehicles, Venue (a compact SUV), Creta (mid-size SUV), Tucson (a premium mid-size SUV and the Kona electric SUV.

The company on Wednesday unveiled a variant of the Tucson at the Auto Expo and will introduce a variant of the Creta on Thursday.

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