In the last 18 months, Hyundai has launched 7 new products in India. Bo Shin Seo, MD & CEO, HMIL, reveals why the Korean car manufacturer is betting big on the indian market.
BY INDIRA RAO
It was way back in 1998 during its inception that Hyundai Motor India Limited (HMIL) took the Indian market by storm with the launch of its iconic Santro. With its revolutionary tall boy design and exemplary engineering, the car revved up the market instantly. Since then HMIL have been frontrunners in innovation and reliability.
Reminiscing, Bo Shin Seo, MD & CEO, HMIL, said, “We were the first ones to introduce the multi-fuel injection engine systems in a market then dominated by carburetor technology. Right from inception, as a matter of commitment with regard to quality to both domestic and international customers, we have been manufacturing our products without a dedicated export line which means that we maintain uniform quality in all products be it for export or the domestic market. The only difference will be the compliance to country specific legislative norms.
“Our launches are also for the global market. The recent launches of elite i20 and Grand were first done out of India and then other parts of the world. The upcoming launch of Global SUV Hyundai Creta will start from India post which it will be launched in the global markets. We are also the only car manufacturer to have developed a car specifically for the Indian market right from scratch. Extensive research went into developing the Eon which has been very well accepted by the Indian customer.”
Quite a few strategic investments have been made at Hyundai’s plant in Chennai, which has further helped them to increase localisation levels to enhance product competitiveness. This includes having a flexible engine plant capable of manufacturing petrol and diesel engines on the same lines.
“Also, this is the only plant to have an aluminium foundry in-house production facility. We have an engine block machining line where both aluminium and cast iron blocks are machined in the same setup; Machining in this manner is a first of its kind in the world,” asserted Seo. The plant also has a cold testing engine facility, which is an advanced cost-effective system that promotes energy conservation by saving fuel and the smokeless testing is environment-friendly. This is absolutely green technology.
What aids their research is also the nine R&D centres scattered around the world. The centres are engaged in design improvement, researching advanced technology, fuel cell development, improving vehicle stability with lighter materials and much more. “Our Indian R&D centre Hyundai Motor India Engineering (HMIE) at Hyderabad plays a major role in conjunction with global R&D right from the concept stage of a product. It supports the headquarters in the domain of engineering services such as mouldings, drawing releases, design, homologation, vehicle evaluation and design support in power-train domain. They research local trends and customer preferences and develop car designs best suited for Indian customers. Thanks to India’s advanced IT infrastructure, they are able to do plenty of digital modelling and studio engineering,” stated Seo.
Another factor that has led to HMIL’s success story in India is its firm belief that innovation encourages performance efficiency, improves design, cuts wastage and reduces fatigue. “We bring innovation in production, marketing, sales and service for customer delight. I have been in India for the last five years heading production and now hold the position of managing director of Hyundai Motor India. I have worked very closely with Indian employees and am a firm believer that they are very skilled and have strong will to perform. In addition, they are also creative and very innovative. They are able to come up with many innovative suggestions which have improved material, processes and quality, thus impacting our final product and brought down costs at the same time. In my opinion, failures provide an opportunity to learn and improve and the industry and customers are good teachers from whom we can continue to learn,” opined Seo.
Employees at the company are encouraged and incentivised to innovate and experiment. It also helps in increasing employee engagement and individual development. There are numerous innovation programs and competitions which see the active involvement of employees from various shopfloors. More than the presentation, it is the whole-hearted participation and healthy competition between various teams and departments that matters. For example, they have a programme called ACT 302 where they encourage employees to suggest ways of cutting down costs while improving efficiency. “We have a strong reward and recognition system in place which recognises such efforts of the employee. This has not only helped us save costs annually and kept us in the forefront of the industry, but has also ensured a team of highly motivated employees,” averred Seo.
It is this team of motivated employees that holds the responsibility to produce cars without compromising on the global quality principles. HMIL has the most modern and sophisticated flexible manufacturing plant in Chennai to make cars for the domestic and export market. “This helps us to balance out the production for various markets and meet the demand regularly,” said Seo.
Spread over 535 acres of land, the factory produces a wide range of models across segments – Eon, i10, Grand i10, Elite i20, Xcent, Verna, Elantra and Santa Fe. Every 68 seconds a car is out and around 2,200 cars are produced per day. Flexibility is one of the USPs of the plant with petrol and diesel variants being manufactured on one line. “We use robots extensively to reduce manual fatigue and improve quality and productivity. We have a global body build line which is unique in India and allows us to adapt to market requirements very quickly and change over to new products in no time. Some of our unique systems like Hyundai Integrated Vehicle Inspection System (HIVIS) and visioning systems ensure that the product is tested for quality at every stage. These systems prevent a defective system from moving to the next stage,” stated Seo.
Some processes like windshield fixing still remain manual but many others like sealer application, fixing of panels in body shop, solvent-based painting are examples of automation. “Despite our visioning system being highly sophisticated, we have retained the manual audit which provides a personal touch. These changes have had a hugely positive impact on our quality,” averred Seo. They also have dedicated departments looking into new car quality and manufacturing processes. They assist specific production process to ensure superior quality.
“We have more than 500 engineers working in such departments. Moreover, our R&D teams at Hyderabad and Korea work in tandem to produce India-specific products, right from concept stage to mass production. These are just a few examples of how we are different from our competitors,” said Seo.
Processwise, too, HMIL regularly benchmarks their systems globally and ensures that they adopt the latest trends. “Our products are robust to sustain in tough Indian conditions and have been highly accepted by our customers. Our employees also undergo regular technical training to handle advanced machinery which keeps them updated, upgrades their skills and motivates them to come up with further improvements. All these factors have combined to keep our products affordable, while delivering high on performance,” asserted Seo.
Contributing to the affordability factor is also frugal engineering, which is practiced at every stage. Seconding, Seo added, “We have commonalised our parts for different products and have more than 90% localisation of our parts which has helped in keeping the cost low. We have also re-engineered where necessary to make our cars suitable for Indian customers as their driving habits, road conditions and fuel quality are a little different and unique. We have, thus, made the seats a bit softer, the ground clearance higher, the suspension a bit harder, created more seating space, space for accessories and one-litre bottle holders.”
HMIL has developed the Eon, Santro and i10 for the Indian market specifically. “However we do continuous research of the Indian market and the needs of Indian customers to offer them world-class products. Our goal in future is to bring a benchmark product to India and set the trend for various segments we are operating in.”
They have also been consciously reducing their energy consumption per car by encouraging energy saving. To do this, they have deployed solar and LED lights, have a Regenerative Thermal Oxydisation (RTO) plant in the paint shop which recycles thermal heat, and have four rainwater harvesting ponds which meet 30% water requirement of their factory. Moreover, each department is treated like a cost centre and are given targets to identify ways of cutting costs. Monthly profitability meetings are held to review and brainstorm on what has been achieved in terms of cost reduction and how they can further reduce, reuse and recycle. Thus, the company is steadily developing technologies to achieve zero emissions and improve eco-friendliness of its cars.
“Use of direct injection systems that improve efficiency and reduce emissions in gasoline engines, high-efficiency transmissions that deliver excellent fuel economy and use of advanced high strength steels that reduce the weight of vehicles are some steps towards eco-friendly cars. In India, we already have LPG and CNG based cars. All our current products confirm to BS V norms in India. When it comes to hybrid vehicles, Hyundai Motor Group has already commercially produced the ix35 fuel cell vehicle which is the first mass-produced, hydrogen-powered fuel cell vehicle, available in select countries. We have the technology but yet it is also important that a suitable infrastructure is in place to support environment-friendly cars,” mentioned Seo.
While it has products dedicated to the domestic market, the number of cars exported are huge with HMIL being one of India’s top car exporters. Talking of its export policy, Seo said, “There is a dedicated export group that takes care of the demands of export markets. We have the capability and flexibility to make more than 1,000 variants to meet the export market requirement. We have 35% market share in India and export to almost 100 countries. The focus is more on emerging markets of Africa, Latin America and South East Asia. In addition to this, the endeavour would be to penetrate deeper in the existing markets of America, Middle East, Peru, Chile, Columbia, Mexico, Australia with a range of our benchmark products like Eon, i10, Grand, Xcent and Elite i20, Verna. Currently, the ratio of exports to domestic sales is 40:60.”
It’s no wonder then that today they are in a position to better serve the Indian customers and also offer high quality products for global consumers. Marking four successful world premieres in the past 18 months for Grand, Xcent, Elite i20 and Active i20 Hyundai has strengthened its commitment to the Indian market offering modern-premium world class products.
“In less than 18 months, Hyundai has launched seven new products — Grand, Xcent, Elite i20, Santa Fe, all new Fluidic Verna, Active i20, 2015 Elantra —and entered new segments. This clearly shows our emphasis on the domestic market. Our growing volumes in domestic market which include new and loyal customers for years are the indicators of becoming the most-loved brand in India,” affirmed Seo.
Today, Hyundai India contributes 14.5% to the overall sales of the Hyundai Motor Group globally and this is expected to go up in the future. Elaborating on the future plans, Seo concluded, “We believe in offering multiple choices within a segment to cater to the variety of demands of the aspirational and value-seeking Indian customer. We will be launching our new Hyundai Creta in July which is based on Hyundai’s next- generation and evolved Fluidic Sculpture 2.0 (FS2.0) design philosophy. We also plan to expand our sales in the domestic market and are eying a target in excess of 4.5 lakh units, while continuing to maintain our leadership in the export market.”