India revs up global auto cos’ engine

After Suzuki & Honda, Hyundai Rides High On Desi Ops As Downturn Impacts Growth Pankaj Doval TNN  New Delhi: The midas touch of India is clearly visible on the financials of global auto majors. Just like Japanese auto majors Suzuki and Honda, which get a sizeable portion of their revenues, sales and profits from their Indian subsidiaries, Korean car giant Hyundai too is increasingly banking on its Indian operations for adding weight to its business as numbers stay uncertain in developed markets due to the recession.      Hyundai, which started operations a decade ago and now enjoys a strong presence in India, said the country is playing a pivotal role in the company's global operations and is expected to contribute more to profits than even from China.      H W Park, the new MD & CEO of Hyundai India, said the Indian subsidiary contributes between 15% and 20% to Hyundai's global turnover. Asked about the profit, he refused to quantify, but said it is expected to be higher than China next year. The Indian subsidiary had been making profits for many years.      Park said unlike China, India has a unique position in Hyundai's operations as factories here not only service the domestic market but also cater to overseas markets in Europe.      "While China only sells domestic, India is used both for domestic and export markets.'' Higher profits, however, could be justified considering that the companies have to operate through a joint venture in China, while in India, solo operations are allowed which mean full repatriation of profits to the parent.      Hyundai, which is currently the second-biggest car maker in India behind Maruti Suzuki, has an annual production capacity of around 6 lakh units, half of which is used to service export markets. The company has earmarked India as one of the hubs for manufacture of compact models like i10, i20 and the Santro and sells the India-made cars to over 100 countries.      While developed markets in Europe and the US remain under pressure, operations in India have been growing. The company's cumulative sales in January-October 2009 period have grown by 12% year-onyear at 4.57 lakh units (4.07 lakh) with domestic sales up 11% at 2.39 lakh units and exports up 13% at 2.17 lakh units.      Hyundai is not the only company to benefit from a strong presence in India.      Suzuki trebled its full-year global net income forecast on the back of strong Indian operations, despite sluggish sales overseas. While home market Japan as well as European countries contracted for Suzuki, India remained the only market to grow, with first half sales here moving up by 24% at 4.7 lakh units against 3.8 lakh units in the corresponding period.      Honda is another company that is reaping benefits of an early entry into India. The company has been gaining due to its strong presence in the two-wheeler market. Its twin two-wheeler joint venture—Hero Honda and fully-owned Honda Motorcycle and Scooter India (HMSI)—are expected to contribute as much as 40% to global motorcycle production and also a sizeable portion of profits and revenues.  Golden Goose  Indian subsidiary contributes between 15% and 20% to Hyundai's global turnover and profit is expected to be higher than China next year  Suzuki trebled full-year global net income forecast on back of strong Indian operations, despite sluggish sales overseas. India remained the only market to grow  Honda's JV Hero Honda and own operations HMSI are expected to contribute 40% of its global production