Hyundai R&D on for cheap small car

3 November, 2007

Lining up concrete measures to combat cut throat competition and stay ahead in the market, Hyundai Motor India may launch a cheap small car in the country. According to auto industry reports, the car major is looking at building a small car that would cost something between Rs 1 lakh and Rs 2 lakh. The plans come at a time when players like Tata Motors and Renault-Bajaj are also rumored to be building low-cost cars. Tata Motors is reportedly building a Rs 1 lakh car that will be launched by 2008. Renault is studying the feasibility of making a $3,000 car in India with motorcycle maker Bajaj Auto.

Hyundai will reportedly conduct feasibility research at its proposed research and development centre in Hyderabad. This research and development centre will be built over 15 acres of land at an investment of $40 million, and will be operational by 2008.

On November 1, 2007, Hyundai unveiled its new i10 model, which is an upgrade of its popular Santro small car. The new i10 model comes fitted with a 1.1-litre petrol engine. Hyundai expects to make 220,000 units of the i10, of which half would be exported.

Hyundai is also setting up a new plant in Chennai to double its annual capacity to 600,000 units by the end of 2008. A new engine and transmission unit costing $263 million and with a capacity of 1 lakh units will come up at the Chennai plant. The new Hyundai i10 will be manufactured at the Chennai plant that will be scaled up to produce 3 lakh more cars per year at an investment of $528 million. Hyundai plans, as of now, to roll out as many as 3 lakh cars from the Chennai plant.