South Korean auto giant Hyundai Motor Group is accelerating its post-China strategy by expanding its production base in India, one of the world’s top three automotive markets.

Hyundai Motor Co. said Wednesday that Hyundai Motor India Ltd., signed an asset purchase agreement for the acquisition of assets related to General Motors India’s Talegaon Plant in Maharashtra. The agreement was signed at Hyundai Motor India’s office in Gurugram, Haryana, India.

Once approvals are made by relevant government authorities, Hyundai Motor will acquire full rights to the land and facilities of GM India’s Talegaon plant.

Hyundai Motor did not disclose details on the acquisition price, citing mutual discussions with GM.

GM withdrew from the Indian market in 2017 and the Talegaon plant suspended operations in October 2020. The plant, while in operations, had an annual production capacity of 130,000 units.

Hyundai Motor plans to begin mass production at the Talegaon plant from 2025. The company is considering expanding the plant’s production capacity by improving facilities in stages.

“Taking into account this acquisition and future plans to further expand capacity, Hyundai Motor’s total production capacity in India including that of existing plants will reach up to 1 million units,” said an official from the company.

Last year, India saw about 4.76 million in new vehicle sales surpassing 4.2 million of Japan to become the world’s third-largest auto market after China with 23.2 million and the U.S. with 14.2 million.

Sales of passenger cars stood at 3.8 million units and are expected to exceed 5 million by 2030. While the size of new car markets in major countries last year was smaller than five years ago in 2017, the size of India grew by 18.5 percent during the same period.

Hyundai Motor sold 552,511 vehicles with a 14.5 percent market share in India last year, ranking second behind local player Maruti Suzuki India Ltd.

This year, the company has sold 346,711 units as of last month and remains in second place with a 14.6 percent market share, but it needs to increase its production capacity to meet the rapid growth of the Indian auto market.

It is also building a local production system for electric vehicles (EVs).

With the acquisition of the Talegaon plant, Hyundai Motor plans to take advantage of the increased production capacity for its flagship internal combustion engine models at the Chennai plant to produce new EVs.

By Moon Gwang-min and Choi Jieun

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