Hyundai Motor’s India subsidiary is struggling with falling sales and profits despite having gone public less than a year ago. As it nears the first anniversary of its IPO in October, the automaker is now betting on a newly acquired plant in Talegaon to drive a rebound, with plans to focus on electric vehicles and export-only models.

On Wednesday, Hyundai Motor India released its earnings report for the second quarter of this year—the last set of financials to be disclosed before its first “CEO Investor Day” since listing on the Indian stock exchange in October 2023.

Despite positioning itself as India’s “national car brand,” Hyundai has seen its performance decline since the IPO. In the second quarter, the Indian unit reported revenue of around 2.6 trillion won ($1.84 billion), down 4 percent from the third quarter of 2023. Net profit fell 1 percent, while both revenue and operating income dropped by approximately 8 percent year-on-year.

The sharpest decline came in sales volume. Hyundai sold around 180,000 vehicles in the quarter, combining domestic and export markets—down 7 percent from pre-IPO levels. For the first time in recent memory, the company lost its No. 2 spot in India’s passenger car market to local competitor Mahindra. Aggressive discounting to boost sluggish local sales also hurt profitability.

In response, Hyundai is banking on its new plant in Talegaon, Maharashtra, as a key production hub for EVs and exports. Tarun Garg, Chief Operating Officer of Hyundai Motor India, said in an earnings call earlier this month that engine production began at the new facility in mid-June, with full vehicle assembly expected to commence in the fourth quarter.

The Talegaon plant is projected to produce 120,000 units initially, with capacity ramping up to 250,000 units annually. Once fully operational, Hyundai’s total production capacity in India will reach 1.1 million vehicles per year—second only to Maruti Suzuki, which produces 2.25 million units. Rivals Tata Motors and Mahindra trail with 1 million and 580,000 units, respectively.

Garg noted that the new plant will be dedicated to electric vehicles and export-oriented models. While EV penetration in India remains below 1 percent, Hyundai sees an opportunity to enhance profitability by targeting this emerging segment. The company also plans to establish a local battery assembly line, which would provide a competitive cost advantage.

In February, Hyundai launched the India-exclusive Creta EV, priced in the 20 million won range. The company sold 1,795 EVs in Q2, placing it fourth in India’s EV brand rankings.

Exports are also a bright spot. Hyundai exported 48,140 vehicles in Q2, accounting for about 20 percent of total sales. Despite overall sales slipping, the company’s export volume has continued to rise post-IPO. Neighboring countries like Pakistan and Bangladesh—home to roughly 250 million and 170 million people, respectively—represent promising growth markets.

As the U.S. finalizes tariffs on automotive imports by product category, global carmakers are increasingly eyeing India as an alternative production base. India ranks as the world’s third-largest auto market, with annual sales of about 4.8 million vehicles, behind only China and the U.S.

[ⓒ 매일경제 & mk.co.kr, 무단 전재, 재배포 및 AI학습 이용 금지]