Hyundai sees India as a global hub for development of small cars

The local arm of South Korea’s Hyundai Motor Co. is planning to make India a global hub for developing small cars, said a senior company executive.

“We are thinking that India might be not only the production base but also a global hub for the development of small cars in the future," S.S. Kim, chief executive and managing director, Hyundai Motor India Ltd (HMIL), said in an interview.

The automaker currently has about 1,000 employees in India for research and development (R&D). Bulk of the workforce is based at Hyundai’s R&D centre in Hyderabad and a handful at its company’s manufacturing facility in Chennai to coordinate between the two sites.

In an attempt to ramp up the Hyderabad centre, it is in the process of deepening its product development capabilities for better integration with the parent’s R&D centre in Namyang (Hwaseong, South Korea), which serves both Hyundai and Kia brands.

“Namyang is the global centre of new category development, new vehicle and technology innovation. But, right now, we are in the process of transferring some responsibilities from Namyang to the Hyderabad unit. So, a lot of design functions across trims and body structures, electric systems, and many other R&D tasks are transferred to the local unit for designing and testing for end applications," said Kim.

He said the step is being taken to improve synergies between Hyderabad and Namyang, reduce the time-to-market and address competitive intensity.

As the Hyderabad R&D unit becomes increasingly important for Hyundai’s global network, the company is also considering setting up an automotive proving ground in India to carry out full-fledged vehicle testing.

“It is not confirmed right now, but we are evaluating a proving ground for India," Kim said, adding that noticeable changes will be seen in Hyundai’s India R&D unit within the next five-years.

While the passenger car platforms for India are currently designed and developed at Namyang, Hyderabad contributes in integrating vehicle platforms with parts and features designed for the local market. For example, the centre designed and integrated the rear air-conditioning vents across Hyundai models sold locally.

“Our (vehicle) platforms and systems are common and are utilized on a global basis. So, the basic (vehicle architecture) can be defined by Namyang and the localized portions can be developed by the Hyderabad centre," Kim said.

Last month, the parent company had announced the introduction of virtual reality (VR) design evaluation system at the Namyang R&D centre. As part of its plan to infuse KRW 15 billion ($12.8 million) in the Namyang unit, the new VR-enabled systems would help cut down the annual product development costs by 15% for Hyundai and Kia, boost profitability and achieve a 20% reduction in vehicle development time. Hyundai plans to establish remote VR design assessment capabilities across its strategic R&D centres, including in India, for real-time virtual collaboration between teams across geographies.

Hyundai Motor Co. plans to tap into the talent at its Hyderabad R&D unit, which is being revamped for a global product development role. “The local R&D unit is also studying several projects including electric, hybrid and fuel-cell technologies. Furthermore, although HMC and Namyang will decide on joint engineering work with Ola Electric, this can be another project in the sight," said a senior consultant working with the company, requesting anonymity. Although HMIL refused to divulge investment details on its R&D expansion, it had earlier announced an investment of $1 billion between 2018-2020. Meanwhile, HMC has already invested $4.1 billion in India until now.