Hyundai puts India bus plans on hold

Plans by Hyundai Motor to roll out buses on Indian roads seem to be not taking off for the moment.  The South Korean auto major has reportedly put its plans to sell buses in India on the backburner.

It may be recalled that Hyundai Motor Company had recently inked a technical deal the London-headquartered Caparo group to manufacture buses in India. It was expected that Caparo would set up a plant for making buses in south India.

The assembling unit was planed as a Caparo venture and promoted through an independent company, which was to invest a few hundred crores of rupees to set up a facility in South India.

The proposed facility was supposed to have an annual capacity of 1,500 luxury buses. The two companies had agreed that the plant would be an assembly unit of completely knocked down parts imported from South Korea. The facility was to cater to domestic as well as export markets.

It is being said that Hyundai’s bus plans for India has been stalled owing to the fact that the country’s economy is going through a slow down phase. Hyundai Motor has said that the decision was primarily due to a slowdown of India’s economy and the plan to expand into India’s bus market is being put on hold due to the recent economic crisis.

Industry sources, meanwhile, said that Caparo and Hyundai Motor officials have sat together arrived at a deal on this. The understanding is that the project has been put on hold temporarily due to the economic slowdown. However, it is expected that the project is likely to be revived in the next three quarters’ time.

Meanwhile in the passenger car segment, Hyundai in India had posted drop in sales for the first time during the current year. The sales figures of November showed that the company’s domestic sales dropped 23 per cent to 14,605 units, against 19,052 units for the same month last year.