The country's second-largest auto maker Hyundai Motor India (HMIL) is scouting for locations in the Czech Republic, Slovakia and Turkey in Europe to manufacture its popular selling premium hatchback 'i20' range of cars.
Though Hyundai expects the move will make the 'i20' more competitive in the European market, it was actually forced to take such a decision due to 'high logistics cost' and 'import duty'.
"The shifting of the export base is due to high logistics cost and a 6.5 per cent import duty levied by EU on exported cars," HMIL Managing Director H S Lheem told reporters
Lheem suggested that India sign a Free Trade Agreement (FTA) with the European Union in view of high import duty. "If that did not happen, we may lose our competitiveness," he said.
The company's plant at Irungattukottai about 55 km from here, has a production capacity of 6 lakh cars a year.
However, once the export base is shifted, the plant here would be utilised to manufacture a new car in the entry level segment, which is expected to hit the market in two years, he said HMIL currently sells the 'Santro' model in this segment.
He said the Chennai plant would also be used to manufacture 'i20' due to increased demand in the domestic market.
HMIL witnessed a 17.63 per cent increase in sales in June 2009 at 47,267 units as against 40,182 units in the last fiscal. In June, exports increased by 32.5 per cent to 24,251 units from 18,301 units, as compared to the same month last year.
