The production of Hyundai Motor India Ltd’s bestselling SUV Creta has been disrupted after a fire at supplier and group company Hyundai Mobis curbed the availability of key components, according to two executives aware of the matter. The company is making alternative sourcing arrangements.
Daily output at one of its two plants in Chennai has fallen to about 200 cars from over 1,000, according to one executive.
“Majority of the production at this plant is for Creta, which is seeing the highest impact. The company will depend on imports temporarily to resolve the issue as Mobis has plants outside the country. It should get back to normal in the next two weeks but there is urgency to ensure supplies to dealers to prevent a hit to sales,” the executive said.
The availability of inventory with dealers means there is no immediate impact on sales. However, Hyundai is rushing to resolve the issue in the week ahead before supply constraints to dealers start hitting sales numbers when it is locked in an intense competition with Mahindra and Mahindra and Tata Motors PV for the No. 2 position in the passenger vehicle market.
“The temporary production disruption is confined primarily to Chennai Plant 1 of the Company. This facility is also expected to regain its production pace by June 15, 2026, and all production operations are projected to return to normal by June 22, 2026,” Hyundai said in an exchange filing on Wednesday.
The fire broke out on 31 May at the Hyundai Mobis plant near Hyundai India’s manufacturing facility in Chennai.
The company did not respond to Mint’s queries sent on Monday on the potential impact of the production disruption. Hyundai sold over 578,000 vehicles in FY26, with the mid-size SUV Creta accounting about a third of the sales.
Plant capacity
Hyundai India shares opened 1% higher on Wednesday as against a 0.24% decline in the Nifty Auto index. Since the incident, Hyundai’s shares have remained little changed compared with a 1.4% decline in the Nifty Auto.
Hyundai Motor India has three plants in the country—two in Chennai and one in Pune, which was inaugurated in the last financial year. The two plants in Chennai have a capacity of about 824,000 units per year while the Pune plant can produce 170,000 units annually.
“The company expects that any loss of production arising due to this incident shall be mostly recovered within the next quarter itself,” Hyundai India said in the exchange filing, noting that there would not be any impact on retail sales in June.
Experts suggested that companies do not have many options when supplies of critical components are hurt.
“In such cases where alternative suppliers are not possible, companies have to help the supplier get back on track. Moreover, another option is to look for supply arrangements from other plants of the supplier if spare capacity is available,” said Ashim Sharma, senior partner and business unit head at Nomura Research Institute Consulting and Solutions, India.
Hyundai, which listed in India in October 2024, counts the country as its largest market and its plants act as a hub for exports to emerging markets in West Asia, Africa and South America.
In FY26, the company ceded the No. 2 position for the first time since FY09 due to a surge in sales of Mahindra and Tata Motors PV.
Gurugram-based Hyundai’s consolidated net profit declined 4% to ₹5,432 crore in FY26 as margins took a 50-basis-point hit to end at 7.6%. Revenue grew 2% to ₹70,763 crore and sales rose 1.7% to 775,031 units.
With a fully localized manufacturing base, Hyundai makes models including Creta, Venue, Exter, i20, Verna and Aura. It plans to launch at least two new nameplates in FY27 to wrest back market share.
Hyundai Mobis, a part of the global Hyundai Group, provides key components such as chassis, cockpits and front-end modules for Hyundai India's production. While Hyundai entered India in 1996, Mobis began its operations in 2007 to aid Hyundai's localization efforts.