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We Want To Be The Segment Leader: YK Koo, Hyundai Motor India
In an interview with BW Businessworld, YK Koo is the Managing Director and CEO of Hyundai Motor India, talks about the future of India’s second largest carmaker
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YK Koo is the Managing Director and CEO of Hyundai Motor India since November 2015. Amidst the ongoing celebrations marking 20 years of Hyundai India, Koo speaks to Ashish Sinha on the future of India’s second largest carmaker.
Many congratulations for completing two decades in India. Tell us about the future plans. What can we expect in the next 2-3 years?
We are happy with our 20-year successful journey in India. Now, we are looking ahead at the next 20 years. Till 2020, we are targeting to launch 8 new products, a power train, and related infrastructure that will entail a combined investment of $1 billion. We are looking at launching a new compact SUV by April next year. Our plant at Sriperumbudur (near Chennai) is ready for the future and we plan to meet the safety and emission norms in advance, even before the mandatory industry implementation in 2019.
For our Chennai plant, we have adopted futuristic technologies to produce vehicles. We recently achieved a new milestone by becoming the fastest Indian automobile manufacturer to roll out 8 million cars in 19 years and nine months. We’re currently producing 75 percent for the domestic market and 25 percent for the export market. In the next three years or so, we hope that domestic sales will account for 80 per cent of our production.
There is talk that AH2, the small car, will be the new Santro. Tell us how AH2 differs from the Santro and what will it finally be called?
The Santro was launched in 1998 and ended production in 2014. The AH2 will be a contemporary car but very powerful for the metro and non-metro market. We are targeting 8,000-10,000 units per month. It will be a very different car from the Santro. It will be a compact car and should give us volume. We will be launching the naming campaign from August 16. To align with the government’s vision of bringing electric vehicles to India, we are also gearing up to produce electric vehicles at our Chennai plant.
Tell us more about your manufacturing plant which is nearing 100 percent capacity. How will you manage the future requirements?
Our plant is spread across 535 acres and equipped with over 590 generation 4 robots, with quality and testing capabilities. Yes, the plant is running at almost 100 percent capacity but till 2020 we do not need more capacity addition. Very soon we will increase our production capacity from 7.13 lakh units to 7.50 lakh units in 2019 which will be sufficient till 2020. Hyundai Motor’s future-ready plant is a true expression of manufacturing excellence. Our journey in India started with the Santro equipped with multi-fuel injection and Bharat Stage-II technologies — the first in the industry — and today through our smart and value engineering we have been producing the most iconic and ‘awarded’ cars from our plant.
For the next 20 years, you said you are looking at market leadership. How will you achieve leadership?
We are not looking at market leadership in volume but in terms of value. Unfortunately, the market leadership in India is restricted to the number game and it is all about volumes. But what about customer choice, value for customer, customer satisfaction and value for the brand. Of course, there is also value for the quality of products. Look at the BMWs and Mercedes’ of the world. They sell 1,000-1,500 units a month. But look at their value and customer satisfaction. So leadership is not always about the volume game. Other aspects matter too. We want to be segment leaders. For example, the segments where the Verna, Creta, i-20 and others operate. We are the leaders there.
You have talked about launching your electric vehicle (EV) in the second half of 2019. For EVs, what sort of support do you require as a manufacturer?
The government wants to focus on EV products, which have zero emission. So we have decided to plan the launch of an electric SUV by 2019. But we will need support on the GST front. We will require a reduction in GST for EV products from 12 percent to 5 percent, and a cut in import duty on CKD (completely knocked down) kits for electric vehicles. We need tax rationalisation for sure. If they do that, we will be even more encouraged to support the electric vehicles programme. Look at my country—South Korea. There is a big waiting period for electric cars. Same is the case in Europe and America. With the right infrastructure support, coupled with a friendly tax structure, even Indian consumers will be keen to drive an EV.