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New Delhi: In the wake of the protracted economic downturn and weak consumer demand, Korean automobile major Hyundai has decided not to construct a new manufacturing plant in India at least for the next two-three years.

However, the carmaker believes that new product launches would aid the company to maintain sales momentum next fiscal despite many short-term challenges such as BS-VI norms come into effect from April 1.

Hyundai Motor India MD & CEO SS Kim mentioned that the company’s “current capacity is sufficient” to meet its domestic and export demand, and hence plans for any massive major expansion will not happen soon.

“While we always study various scenarios and options for production and sales expansion, I think the right time to restart the study for another expansion will come in two-to-three years, considering the existing market situation,” according to the Times of India newspaper which quoted Kim as saying.

Kim is of the view that sales in 2020 to be “near flat, or single-digit positive”, but largely below the 2018 numbers. In 2019, the Korean auto major posted a 7 per cent drop in domestic sales in India, while the dip was 3 per cent after including exports, as per the report.

Besides, Maruti Suzuki India—the country's largest carmaker—has also delayed start of production from a third manufacturing line (with 2.5-lakh-annual capacity) in view of the slump.

Kim said that market sentiments in India are not positive at present. It may take at least three years to achieve the sales level achieved in 2018, when market conditions were still upbeat.

Hyundai is reportedly considering bringing green vehicles in India, and working on an electric car that will cost under Rs 10 lakh, said Kim. Currently, the auto major’s electric vehicle Kona mini SUV costs over Rs 23 lakh and has received a tepid response.