Hyundai India, the maker of popular Santro, to export completely knocked down kits from IndiaHMIL, the manufacturer of the popular Santro, Verna, Getz, Accent, Sonata, Elantra and will sell knocked down car kits for assembly in other markets.
Apnaloan.com Research Bureau
10 Aug 2007
For the first time in his history, Hyundai Motors India Ltd (HMIL), the manufacturer of the popular Santro, Verna, Getz, Accent, Sonata, Elantra and will sell knocked down car kits for assembly in other markets, in an effort to boost export revenue.
According to Heung Soo Lheem, managing director and chief executive of Hyundai
India, company plans to sell as much as 50,000 car kits in two years in
various markets like Iran, Russia and Ukraine. This is to take advantage of
the difference between import taxes on fully built cars and knocked down car
All countries, including India, have large tax difference between imports of fully built car and knocked down kits. In India, the import duty on fully built car is 100% whereas it is only 12.5% for automotive parts. This has led many foreign car companies like DaimlerChrysler AG and BMW to build assembling factories in India. Other country like Russia has 25% Import duty on fully Built car and exempt certain parts from import taxes.
Hyundai Motors India exported 115,525 units in 2007 against 102,092 in the previous year. The company is the largest exporter of the fully built cars.
According to Lheem, the company plans to double its exports to 250,000 units by 2009. Hyundai Motors India is investing Rs 6,000 crore to build up a second manufacturing plant in Chennai, which will help Hyundai Motors to double its capacity to 600,000 vehicles a year from October, 2007.