Hyundai proposes Rs.1,500 crore investment in Tamil Nadu


Chennai : South Korean automobile group Hyundai has submitted a Rs.1,500 crore fresh investment proposal to the Tamil Nadu government and a Memorandum of Understanding (MoU) will soon be signed, a senior official said Friday.

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“Hyundai has submitted a proposal to invest Rs.1,500 crore for setting up plants to make diesel engines and auto components. We are looking into it and soon an MoU to this effect will be signed by the government with Hyundai,” Rajeev Ranjan, principal secretary of industries department, told reporters here.

Speaking to reporters on the margins of the summit on ‘Sustaining Manufacturing Leadership of Tamil Nadu’, organised by the Confederation of Indian Industry (CII), Ranjan said the proposed investment will be the third expansion project for Hyundai in the state.

The Korean group’s car maker Hyundai Motor India has two car plants at Irrungattukottai near here with a total annual capacity of 600,000 units.

Hyundai has been mulling a diesel engine plant in India with locally-sourced components to give customers a wider choice and consolidate its position in the domestic as well as overseas market.

Company officials had earlier told IANS on the condition of anonymity that a diesel engine plant will be viable with an annual capacity of 300,000 units.

The momentum towards a diesel engine plant in India is increasing now as companies are now launching diesel variants.

Currently the diesel engines for Hyundai’s small cars are imported.

On the components side, it is reported that Hyundai Wia, part of the group, will be setting up a plant to make constant velocity joints and manual transmission parts in Tamil Nadu at an outlay of $5 million.

The investment proposal has come at a time when the Tamil Nadu government is planning to announce a new policy governing the auto sector – vehicle and component manufacturers.

The Korean automotive group is developing a small car for the mass market which would be launched soon.

There have also been reports of Hyundai Motor looking outside Tamil Nadu for expansion as it may not find sufficient space at its current location.

According to Ranjan, the government is planning to revise the tax incentive structure for the auto units setting up their shop in the state.