India to become Hyundai’s largest manufacturing hub outside Korea as exports gain momentum

Hyundai Motor India is positioning the country as a key pillar in its global manufacturing and export strategy, with capacity expansion and rising overseas shipments set to play a central role in its next phase of growth.The Indian arm of the South Korean automaker is on track to become Hyundai’s largest manufacturing base outside Korea, driven by capacity additions at its Chennai and Talegaon plants. Managing Director and CEO Tarun Garg said the company’s total installed capacity will reach close to one million units with the completion of phase 1 of the Talegaon facility, and is expected to rise further over the next few years.

The Chennai plant currently has an annual capacity of 824,000 units. Phase 1 of the Talegaon plant adds another 170,000 units, taking Hyundai Motor India’s total capacity to 994,000 units. An additional expansion of around 80,000 units is planned by 2028, which will take overall capacity to nearly 1.1 million units.

“Outside Korea, we are going to be the largest Hyundai manufacturing base globally,” Garg told CNBC-TV18, underscoring India’s growing importance in the company’s global operations.The capacity expansion is closely tied to Hyundai’s renewed push on exports. After prioritising domestic demand in the immediate post-COVID period due to supply constraints, the company has stepped up exports over the past 18 months, with results beginning to show.

In the second quarter, Hyundai’s export volumes rose 21.5% year-on-year, with exports contributing 27% to overall sales. The company now plans to raise the export share to 30% over the medium term.

According to Garg, Hyundai’s export strategy rests on a two-pronged approach — entering new international markets and leveraging new models developed in India. The all-new Hyundai Venue, which is being produced at the Pune plant, is exclusively manufactured in India for global markets, opening up fresh export opportunities.“For any new model, we will always look at export opportunities,” Garg said, adding that Hyundai’s strong brand presence in regions such as the Middle East, Latin America and Africa provides access to large overseas markets.

Exports also offer a profitability advantage. Garg noted that overseas shipments typically deliver slightly higher margins than domestic sales, supporting Hyundai’s operating performance and shareholder returns. Strong export growth, along with higher SUV sales, helped Hyundai Motor India post an EBITDA margin of 13.9% in the second quarter, close to the upper end of its guided range.

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Hyundai has indicated that it expects margins to broadly remain between 11% and 14% over the next five years, even as it absorbs costs linked to ramping up new capacity and navigates commodity price volatility.

With India emerging as a manufacturing and export hub, Hyundai’s strategy reflects a broader shift towards using the country as a base not just for domestic growth, but also for serving global markets at scale.

Watch accompanying video for entire conversation.