Hyundai Motor India Outlines Production Capacity and Localisation Targets

NEW DELHI — Hyundai Motor India Ltd (HMIL) has announced a long-term manufacturing and market strategy aimed at increasing its annual production capacity and component localisation levels over the next decade.

Speaking at the launch of the new model, Bayon, HMIL Managing Director and CEO Tarun Garg stated that the company currently holds an installed annual production capacity of 9.94 lakh vehicles. Under the newly outlined roadmap, this capacity is targeted to reach 1.14 million units by 2030. Garg noted that the company's two manufacturing plants in Chennai remain central to its domestic and export operations, accounting for 8,24,000 units of annual capacity.

Since beginning operations in India in 1998, HMIL has sold nearly 14 million vehicles, comprising 10 million in the domestic market and 4 million through exports. The company's expansion plans coincide with broad growth in India's passenger vehicle market, which has grown from 3.7 lakh units in 1998 to an estimated 52.5 lakh units projected for 2026.

In parallel with its capacity expansion, HMIL is working to increase its domestic supply chain integration. The company currently sources approximately 83 percent of its components locally at the Tier-1 supplier level, engaging with around 200 Indian supplier partners across more than 1,200 localised components. HMIL aims to raise this localisation figure to 92 percent by 2032.

To capture shifting consumer preferences, Hyundai is expanding its vehicle lineup across multiple powertrain options, including CNG, electric vehicles (EVs), and hybrids, alongside traditional internal combustion engines. Garg highlighted that SUVs, CNG vehicles, and EVs are driving the current wave of industry growth, citing year-on-year market growth figures of 29 percent for SUVs, 40 percent for CNG vehicles, and 77 percent for EVs.

Highlighting the performance of the mid-size SUV segment, Garg noted that it expanded from 1.1 lakh units in 2015 to an estimated 8.7 lakh units in 2026, registering a compound annual growth rate (CAGR) of 21 percent compared to roughly 6 percent for the total passenger vehicle market. The newly introduced Bayon, starting at an ex-showroom price of Rs 9.99 lakh, is positioned between the sub-4-meter compact SUV Venue and the mid-size SUV Creta in the company's portfolio.

Furthermore, HMIL plans to launch a mass-market compact electric SUV later in the current financial year as the second new nameplate for the fiscal period, broadening its technology and mobility offerings in the domestic market.

"Hyundai Motor India's long-term focus on expanding manufacturing capacity to 1.14 million units and scaling component localisation to 92 percent reflects a deeply rooted commitment to the Indian market. By strengthening the domestic supply chain and aligning product portfolios with high-growth segments like SUVs, CNG, and electric vehicles, the company is effectively positioning itself to capture future demand while insulating operations against external supply chain vulnerabilities. This structured approach to scale and localisation offers a stable blueprint for heavy manufacturing enterprises operating in high-growth developing economies." — Dr. Shishir Gupta, Founder & CEO, StartupLanes