Hyundai India Worried About Frequent Policy Changes Affecting Investment

Hyundai Motor India, set to raise ₹25,000 crore from the Indian stock market, has expressed concerns over frequent policy changes in the country. The Korean automaker says these shifts impact investment flows and the pace of technological advancements in the automotive sector.

The company, which has invested nearly ₹30,000 crore since its Indian operations began in 1996, emphasized the need for policy stability to adapt to government-mandated technological upgrades. "Frequent changes in policies make it difficult for auto industry stakeholders to ensure adherence and commit investments," Hyundai stated in its draft Red Herring Prospectus filed with SEBI, as reported by The Times Of India.

Despite these concerns, Hyundai plans to invest an additional ₹32,000 crore in India over the next few years. This investment will focus on electronics, green infrastructure development, and increasing production capacity.

(Also Read: Hyundai Plans IPO in India; Aims to Raise $3 billion: Report)

Electric vehicles (EVs) are a key part of Hyundai's strategy, with plans to localize manufacturing for the mainstream market. However, the company raised issues with the government's localization norms for the EV sector.

The Indian Government's push for localization across sectors, particularly automotive, aims to reduce import dependence and lower manufacturing costs. This initiative, however, requires significant initial capital from industry stakeholders.

Hyundai acknowledged government schemes supporting investments through subsidies and import duty benefits. Yet, it noted, "There are still concerns around meeting the eligibility criteria and availing of the benefits."

The automaker called for simplification and better tracking of policies to ensure effective localization in India. It also highlighted that the progress of vendors associated with individual OEMs could alter the industry's risk profile from a supply perspective.

(Also Read: Hyundai Completes Acquisition Of GM’s Talegaon Plant)

To enhance the price competitiveness of its EV models, Hyundai intends to secure local production capabilities for key components such as cells, battery packs, power electronics, and drivetrains. The company aims to build a localized EV supply chain to support this goal.