Hyundai Motor India

India as a Global OEM Power train Manufacturing Centre

J . Sathian

Head of the Department – Kappa Engine Plant

Hyundai Motor India Ltd

10.12.2013

Hyundai Motor India

Overview – Hyundai Motor India

OEM Power Train Manufacturers in India

Why India?

Innovations at HMI

Key Points

Hyundai Motor India

Overview - Hyundai Motor India

CompactSegment Eon, Santro, I10, Grand I10, I20

Mid Segment Accent, Verna

Premium & SUV Elantra, Sonata, Santafe

Description Details

Company Hyundai Motor India Ltd .,

Foundation 6th May 1996

Investment $ 2 Billion

Capacity [Yr] 630,000

Plant Plant #1 [300,000]Plant #2 [330,000]

Domestic M/S - 19%

Export M/S - 48%[114 Countries]

Hyundai Motor India

OEM Power train Manufacturers in India

Hyundai Motor India

Automotive cluster in India

Hyundai Motor India

Hyundai Motor India

Growth of Indian Automotive Sector

Hyundai Motor India

Indian Automotive Sector

The automotives market is split intofour segments

Automobiles

Two-wheelers

Mopeds

Scooters

Motorcycles

Electrictwo- wheelers

Passenger vehicles

Passenger cars

Utility vehicles

Multi-purposevehicles

Commercial vehicles

Light commercial

vehicles

Mediumand heavycommercial

vehicles

Three-wheelers

Passengercarriers

Goodscarriers

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Passenger Vehicle Production Trend

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Passenger car sales in India

Increasing Demand

Domestic sales increased from 1.2 2.2 Lakh

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Reasons for Growing Demand

Rising incomes; growing middle class

• Personal (nominal) disposable income is expected to riseannually by 8.2 per cent over FY11-17

• Rising middle class-size of the middle class expectedto touch 550 million by 2025 from 50 million in 2010

• Favourable demographics - a young population isalso driving up the demand for cars

• Demand for commercial vehicles have got a boost dueto development of roadways and greater marketaccess

Rising incomes and a growing middleclass driving domestic demand growth

Hyundai Motor India

Reasons for Growing Demand

Indian auto finance market size (USD billions)

Source: Kotak Mahindra Prime, Aranca Research

Notes: Greater distributional efficiencies, increasing demand (especiallyfrom rural areas) due to rising disposable incomes have created newmarkets for products within the country

10.611.9 11.9

15.1

20.5

8.0 8.5 7.7

10.6

14.8

0.0

5.0

10.0

15.0

20.0

25.0

FY07 FY08

Car Industry sales volume

FY09 FY10 FY11

Vehicle Finance Penetration

Easier access to credit has also been a key determinant of growth in automotives

Easy availability of credit

• Greater access to credit makes purchases of bothpassenger and commercial vehicles easier

• The auto finance industry has grown at an averageannualrate of 13 per cent during FY08-12

• The private sector banks like ICICI, HDFC are alsoshowing increasing interest in the segment which waspreviously dominated by public players

Hyundai Motor India

Why India?

Low Labour cost

Hyundai Motor India

India has a huge competit ive advantageover peers

Source: ACMA, Aranca ResearchLess competitive than India In competition with India

Design &Engg skills

Manufacturing skills

Manpower costs

Supplier base

Raw material

East Asia

Korea

China

Thailand

Indonesia

Vietnam

Central & EasternEurope

Czech Republic

Romania

Poland

Slovakia

Russia

Hungary

Turkey

Latin AmericaBrazil

Mexico

Why India?

Hyundai Motor India

Why India?

Hyundai Motor India

Ernst & Young (EY) survey revealed that India has knocked China off as the world's most attractive investment destination. Following India is Brazil while China was relegated to the third spot.

"With sharp currency depreciation and opening up of FDI in various sectors, India has become an attractive destination for foreign investors”

The US, France and Japan have emerged as "top three investors likely to invest in India"

Why India?

Hyundai Motor India

Strong inflow of FDI

Hyundai Motor India

Reason for FDI

Sector Has been benefitting from strong demand and product innovation

Growing Demand

• Rising incomes, Young population

• Greater availability of credit & financing option

InvitingPolicy Support

• Goal of establishing India as auto-manufacturing hub

• R&D focus; GOI has set up technology modernization fund

Resulting inIncreasing Investment

• Rising investments from domestic & foreign players

• Strong projected demand making returns attractive

Hyundai Motor India

Opportunities in India

Opportunities

India is fast emerging as Global R&D hub

Opportunities for creating sizeable market segments through innovations

Small car manufacturing hub

Strong education base, large skilled English speaking manpower

Comparative advantage in terms of cost as well

The world’s cheapest car (Tata Nano) has directed focus towards the low-income market

Electric cars are likely to be a sizeable market segment in the coming decade

General Motors, Nissan, Toyota have announced plans to make India their global small car platforms

Strong export potential in ultra low cars segment.

Hyundai Motor India

Why do we need Innovation?

Increasing Competitiveness

Increase in Competitiveness forces Manufacturers to reduce cost & improve Quality

Hyundai Motor India

Why do we need Innovation?

Unresolved Problems = Financial Losses and Lost Opportunities

“Innovation is the most vital factor in shaping a corporation’s success throughout the

coming years. For several decades, corporations have optimized products, processes

and services for efficiency and quality; without losing control of quality, it is now time

to innovate. Global-economic forces and financial constraints have made innovation-

driven growth more essential than at any other time in history

Hyundai Motor India

Innovations at HMI

No Details Remarks

1Meeting the Additional Requirement of Diesel T/M without any Additional Investment

2 Reducing the Tool cost by eliminating Tool breakage

3Reusing the Existing part after modification to avoid additional investment

4Flexible manufacturing system – Cast iron & Aluminum cylinder block produced in same machine

Hyundai Motor India

Innovations at HMI

2nd Gear 3rd O/P 4th O/PO/P Shaft I/P Shaft

Problem : Diesel TM volume increased but Gear Grinding m/c capacity less

Hyundai Motor India

Innovations at HMI

Problem : Diesel TM volume increased but Gear Grinding m/c capacity less

Tail Stock

Fixture

Fixture

Base Plate

Gear

Shaft

Base Plate

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Innovations at HMIProblem : Tool Breakage Elimination

Hyundai Motor India

Innovations at HMI

Problem : Inner sleeve got worn out leading to quality issues

Piston RingInner sleeve

Activity Result

Purchasing new sleeve Lead time high, High investment

Machine parameter change Casting Quality NG

Molten Metal temp change Casting Quality NG

Hyundai Motor India

Innovations at HMI

Problem : Inner sleeve got worn out leading to quality issues

Activity Result

Worn out area welding Sleeve crack due to thermal stress

Reusing the Inner Sleeve Diameter increased from 150 152 & Piston ring modified

Hard Turning Stress Relieving Grinding Nitriding

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Flexible Manufacturing System

Block Machining Transfer Line

CNC Machining Centre

Machines With APC

FMS Model Line

Hyundai Motor India

Flexible Manufacturing System

Machining Line - FMS

Cylinder Block Line

• APC [Automatic Pallet Changer] to avoid model changing time

• Tool changing time elimination [More no of Tool Sprocket]

Cylinder Head Line

• Adaptor plate system to avoid model changing time

• Tool changing time elimination [More no of Tool Sprocket]

Hyundai Motor India

Maker Top View Photo

NTC –Automatic Pallet Changer

Kisabu

Flexible Manufacturing SystemBlock Line Concept

Diesel Fixture

Petrol Fixture

Back Side Front Side

Back Side Front Side

Diesel Fixture

Petrol Fixture

Hyundai Motor India

Flexible Manufacturing System

Benefits

High Efficiency

Multi Modeling

Zero Model Change time

Easy to meet market demands

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Outcomes of Innovation

INNOVATION

PRODUCTIVITY

QUALITY

COST SAVING

PROFIT

Hyundai Motor India

Thank You