South Korean auto major Hyundai Motor Company is looking at increasing sourcing components from India for its global operations.
Currently Hyundai sources only a negligible percentage of components from India for its global needs but wants to increase the level.
"India can be a hub for the components industry. Hyundai will increase (sourcing) from India," Hyundai Motor Company Senior Vice-President (Asia & Pacific Division) Young-Kil Chun said here.
He, however, added that for India to emerge as a major outsourcing hub for components, it would need to improve and maintain the quality of products.
"We do have our vendors based in India who have helped us localise, but if India is to become a global outsourcing hub then a very important issue needs to be addressed first, which is the need to maintain consistent quality," Chun said.
Hyundai already sources up to 85 per cent of the components locally for the cars it makes in India, the company's second-largest market in the world.
Chun said the company has reduced production at the Indian plants in view of the worldwide slump.
"In India, we are currently working two nine- plus nine-hour shifts. Earlier, we were working three eight-hour shifts everyday. So, we have cut down on the production and once the situation improves we will get back to the earlier three eight-hour shifts. We may recover our production sometime after 2010," Chun said
He added that production was reduced by 25 per cent in the first quarter of the year at the company's three plants located in South Korea.
He termed the current market scenario as being in the state of 'flux'.
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"This environment makes it very difficult to make any sales projections or anticipate scenarios. The market the world over has been depressed and we are in the midst of an economic slowdown but remain hopeful and optimistic," Chun added.
Regarding the downslide in the company's sales, he said: "Hyundai is being very aggressive in domestic and overseas markets. (The) US market is doing well and the Chinese and Indian markets are also growing. Hopefully, markets will improve. Sales have suffered worldwide. Hopefully, (sales) will improve by the end of this year, from last year."
He said demand in South Korea is likely to rebound by the first quarter of 2010, while across the world it would take some more time.
On whether Hyundai had plans to bring out a model to compete with the Tatas' Nano, Chun replied in the negative.
"We do not have plans to compete head-on with the Nano, although we will come up with a small car in the next two-three years, which will be placed below the existing Santro. But overall we feel that the launch of the Nano will expand the market and once that happens, it will be good for all manufacturers including Hyundai," he said.
Asked about the company's plans of getting into commercial vehicles in India, Chun said: "We do not have any plans right now. There’s no competitiveness in that market for us –- there are Tata and Mahindra."