India's second largest automaker and top car exporter, Hyundai Motor India invested close to $500 million or about Rs. 3589 crore in FY2020, a recent report states. The funding is part of the Rs. 7000 crore investment that the company had committed to the Tamil Nadu government in 2019. The new investment was made as the company expanded production at its facilities in the state as well as demand for models increased backed by new launches. Hyundai managed to ride out the negative market sentiment, followed by the pandemic and lockdown, while posting a strong recovery curve in FY2021 so far. carandbike has reached out to Hyundai India for more information and will be the report as soon as we get a response.
Also Read: Hyundai To Pump In $1 Billion In India By 2020
Hyundai automated a number processes at its plant removing the bottlenecks in production
The report states that even as the overall market remained in the negative zone, Hyundai India prepared the groundwork for expanding capacity in FY2020. The company increased its annual production to 7.5 lakh units last fiscal by automating certain processes, removing the bottlenecks in production and introduction of new models in FY20. The plant capacity eventually increased to about 8 lakh units per annum. In addition, the company was able to save Rs. 90 crore through a series of cost cutting measures in the last financial year.
Hyundai India registered an 8 per cent drop in output in FY2020 and managed to hold on to a turnover of $5.9 billion or about Rs. 44,000 crore, which was supported by a shift towards higher priced premium offerings. Hyundai's best-sellers have been the i20, Venue and the Creta with the demand being higher for the top variants on each model respectively.
Hyundai had five launches in FY2020 and has been a preferred choice for buyers looking to upgrade
While Hyundai was affected by the economic slowdown in terms of year-on-year sales, the company did manage to conclude the year with a market share of 17.5 per cent. As per financial data shared by Veratech Intelligence, the company registered a 9 per cent drop in net profit for FY2020 at Rs. 2390.6 crore, which was pulled down by high marketing costs, transition of the current portfolio to BS6 norms and the launch of five new models.
The director's report for FY2020 filed by Hyundai stated, "To ensure long-term competitiveness, your company is taking several steps including launch of new products, quality improvement, cost competitive measures and enhancement of customer experience that will help profitability in the long term."
Also Read: 2020 Hyundai i20 Review: Petrol And Diesel Driven
The average price point of a Hyundai buyer has moved up from Rs. 5.5 lakh to Rs. 8 lakh.
Even though the operating margin slipped to 10 per cent for Hyundai, the brand has been a preferred choice for upgraders in India, states the report. The average price point of a Hyundai buyer has moved up from Rs. 5.5 lakh to Rs. 8 lakh. The company's EBITDA margins have also moved into double-digits over the last three fiscals.
Despite the difficult year, Hyundai's production capacity in India operated beyond 90-95 per cent, much higher than the industry average of 50-60 per cent during the same period. However, overall production did drop by nearly 9 per cent to 6.47 lakh units last fiscal, as against 7.1 lakh units the previous year. The automaker though did see a rise in export volumes by 4.8 per cent in FY2020 to 1.62 lakh units, ensuring capacity utilisation.
Source: ETAuto.com
