Hyundai’s Billion-Dollar Bet: India The Key To Global Expansion

Hyundai Motors is planning a significant financial thrust in the active and hectic Indian automobile market. The key question is: what is Hyundai planning for the price-conscious and range-obsessed market territory in the heart of the subcontinent?

The South Korean car giant is planning to use proceeds from a record IPO worth a whopping USD $3.3 billion of its Indian unit for a two-fold purpose. Firstly, the proceeds from this mega sum shall be used towards developing new cars for the Indian market. Secondly, the funds shall also be used for multifarious R&D activities.

Hyundai has been mulling over using India, where it currently sells lakhs of cars per year, as a popular manufacturing hub that can cater to emerging markets. Some of the most popular models from the dependable Korean stable are the Creta, i10, i20, and the Verna. While the Creta is a compact SUV firmly competing against several notable Kia products, the Verna is an elegant and exceptionally performant sedan.

Hyundai’s mega IPO and what it entails

The connection between the two separate words, Hyundai and India, is set to become deeper than before. In just a few days, Hyundai will launch its biggest IPO in the Indian market. It is expected to set a value close to a whopping sum of 19 billion $USD for the company. With India expected to grow akin to a tiger economy, Hyundai’s expansion plans and versatile offerings augur well for a future that could be filled with bright days and plenty of success.

The increase in demand for brand new cars, a trend evident over the past decade or so, could be tied to a rise in India’s middle-class earnings, where the desire to drive a four-wheeled machine has superseded the inveterate need to operate a two-wheeler.

India is the space for unprecedented growth

Even as two-wheelers still clock in the big numbers, with India’s tier-II and tier-III cities such as Allahabad, Lucknow, Ludhiana, Jaipur, Kashi, Indore, and so on driving the incessant demand, the roads of urban cities are dominated by four-wheelers, with domestic brands competing adventurously with foreign makes.

It is worth noting that Hyundai is going big in India for the simple reason that after markets such as the United States, India happens to be the third-biggest revenue generator for the company. Fifteen percent of the firm’s revenue stems from a country known for its mega homegrown brands like Tata Motors and Mahindra. India has currently attracted an investment worth 5 billion from Hyundai, and it is expected that another ten billion will be invested in the coming decade.