Hyundai Motor Group plans to invest US$ 15.5 billion in India between 2026 and 2032 to expand manufacturing, develop research and development (R&D), increase local sourcing and explore emerging mobility businesses.

The investment comes amid intensifying competition from domestic automakers. The plan was discussed during a meeting between Prime Minister Narendra Modi and Hyundai Motor Group Executive Chair Euisun Chung in New Delhi on October 13th. The programme covers manufacturing expansion at Hyundai Motor India Limited (HMIL) and Kia India, R&D infrastructure, component localisation and future mobility technologies.

"India remains one of Hyundai Motor Group's most important and strategic markets globally. The past 30 years have been defined by our commitment to India. This investment reaffirms our commitment to India for the next 30 years and beyond," Chung said.

He further added that the investment would create employment opportunities and support India's industrial development through collaboration with partners and stakeholders. Hyundai Motor Group will establish a dedicated investment entity in India to oversee the programme, coordinate engineering and technology investments, identify local suppliers and technology partners, and facilitate collaborations across the automotive sector.

Manufacturing capacity expansion and proposed new facilities

The group plans to expand production at Hyundai Motor India and Kia India to meet domestic demand, increase localisation and supply other emerging markets. Its combined annual manufacturing capacity in India exceeds 1.4 million vehicles. Hyundai's Chennai facilities can produce 824,000 vehicles annually, while its Pune facility has a capacity of 170,000 units. Kia's Anantapur plant can produce 431,000 vehicles annually.

Hyundai plans to increase Pune's capacity in phases and is assessing a third manufacturing location. Media sources reported recently, that Chhatrapati Sambhaji Nagar in Maharashtra and Sanand in Gujarat were under consideration. According to people familiar with the plans, the proposed plant could add around 500,000 units of annual capacity, with investment potentially exceeding US$ 2 billion. Construction could begin around 2030, followed by phased capacity additions over five to seven years.

Discussions remained at an early stage, with the location, investment schedule and product allocation yet to be finalised. Hyundai had declined to comment on market speculation, and its October 13th announcement did not identify a location or specify the additional capacity planned.

Kia is separately evaluating an expansion at Anantapur. Media sources reported on August 15th that the company was assessing a production line with annual capacity of around 200,000 units. According to people familiar with the development, suppliers had been consulted, but a final investment decision had not been made. Kia did not confirm the proposed line but said operations would be adjusted to market growth and customer demand. It is targeting domestic sales of around 410,000 units by 2030 and preparing additional hybrid and electric vehicle models. Hyundai Motor Group has not disclosed how the US$ 15.5 billion will be divided between Hyundai and Kia or allocated to individual capacity expansion projects.

US$ 700 million for research and development

Hyundai Motor Group plans to invest approximately US$ 700 million in its Indian R&D centre, including a vehicle testing track, engineering infrastructure and automotive technology development. The announcement follows earlier reports about Hyundai's proposed R&D expansion in Telangana. Media sources reported in May 2025, citing a local media outlet, that Telangana had approved a proposed Rs. 85.3 billion (US$ 898.7 million) Hyundai R&D centre.

The proposal covered a Hyundai Global Innovation Research and Development Centre on 675 acres at Zaheerabad, with a test track, pilot production line and prototyping facilities. Hyundai's existing Hyderabad engineering centre was also being expanded to support global compact passenger vehicle development. The latest announcement did not clarify how the US$ 700 million allocation relates to the Telangana proposal.

Local suppliers and supply chains

The group plans to invest in domestic suppliers to increase component localisation, develop supplier capabilities, expand regional supply chains and reduce supply chain vulnerabilities. Its Indian operations include affiliates Hyundai Mobis, Transys, Capital, Wia and Glovis, which operate in component manufacturing, financing, logistics and other automotive businesses. The group also plans to support start-ups and pursue partnerships in emerging mobility technologies.

Electric mobility and other businesses

Hyundai Motor Group plans to explore investments in EV charging infrastructure, specialised automotive financing, end-of-life vehicle recycling and related mobility services. It has previously explored bus-sector opportunities and is developing electric three-wheelers with TVS Motor Company.

Media sources reported that the Hyundai-TVS electric three-wheeler is targeting a launch in late 2027 or early 2028. The companies have signed a joint development agreement to commercialise the vehicles in India and other markets. The wider investment programme will also support start-ups and collaboration in emerging mobility technologies and services.

Employment and skill development

Hyundai Motor Group employs more than 24,000 people in India. The planned investments are expected to create additional jobs in manufacturing, engineering, R&D and supply chains, including through suppliers and mobility businesses. No specific employment target has been disclosed.

The company also plans to establish the Hyundai Academy for Technical Skills (HATS), a vocational training institute in Chennai. Since 2016, the group's affiliates have contributed approximately US$ 110 million towards social welfare, education, skill development and community programmes in India.

Investment amid market competition

Foreign direct investment rules have restricted Chinese carmakers, although some restrictions were relaxed earlier in 2026. Renault and Volkswagen Group from Europe, and Honda Motor from Japan, have also announced plans to introduce new models in India.

Hyundai's investment follows its US$ 3.3 billion initial public offering in India in 2024. The company has lost market share to domestic competitors Tata Motors and Mahindra Group. Its Indian operations previously expanded through vehicle designs, regular model updates and local sourcing, with hatchbacks and sport utility vehicles (SUVs) tailored to local requirements. However, competitors have introduced SUVs with extensive feature packages, and the company has not consistently retained its position as India's second-largest carmaker.

According to the Federation of Automobile Dealers Associations (FADA), Hyundai's market share fell to 11.75% in September, placing it fourth behind Maruti Suzuki at 39.59%, Mahindra at 13.42% and Tata Motors at 13.4%.

The US$ 15.5 billion programme covers manufacturing and engineering expansion, supply chain development and potential investments in electric mobility, financing, recycling and related services. The group has yet to disclose individual project allocations, the location of a potential third manufacturing facility or the additional production capacity planned.