Hyundai India Exploring Third Manufacturing Location; New Plant Could Add 5 Lakh Units Capacity
Hyundai Motor India is reportedly evaluating a third manufacturing location in India as the carmaker prepares for its next phase of growth, new model launches and higher exports.
According to a report by Autocar Professional, Chhatrapati Sambhaji Nagar in Maharashtra and Sanand in Gujaratare among the locations being considered for the proposed facility. Discussions are understood to be at an early stage, and Hyundai has not yet finalised the location, investment schedule, production allocation or initial capacity.
If the project proceeds, the new manufacturing facility could eventually add around 5 lakh units of annual production capacity, with capacity expected to be installed in phases.
Hyundai Could Invest Over $2 Billion in New Manufacturing Facility
The proposed project could reportedly involve an investment of more than $2 billion, separate from Hyundai Motor India’s existing ₹45,000 crore investment commitments through FY2030.
The new plant is expected to become relevant around 2030, with production capacity potentially being expanded over a five-to-seven-year period. At full scale, the facility could contribute approximately 500,000 vehicles annually.
However, Hyundai Motor India has not officially confirmed the project. In response to the report, the company said it does not comment on market speculation or industry rumours and would disclose any material developments through appropriate official and regulatory channels.
Why Hyundai May Need Another Factory
Hyundai already has a large manufacturing base at Sriperumbudur near Chennai, while its newer Talegaon facility in Maharashtra significantly expands its production footprint.
Hyundai says the Chennai and Talegaon facilities together currently provide annual production capacity of around 9.94 lakh units, which is planned to increase to approximately 10.74 lakh units by 2028.
That may be sufficient for Hyundai’s near-term requirements, but the company has an ambitious product and export strategy extending towards the end of the decade.
The latest report suggests Hyundai expects its existing facilities in Tamil Nadu and Maharashtra to move towards high utilisation by around 2030, creating the need for another major capacity expansion.
26 Hyundai Models Planned Through FY2030
Manufacturing expansion is closely linked to Hyundai’s aggressive product roadmap.
Hyundai has outlined plans for 26 product introductions in India through FY2030, including completely new vehicles, generation changes and product updates.
SUVs will remain central to the strategy, while Hyundai is also preparing to significantly expand its portfolio of electric and hybrid vehicles. Hyundai has previously outlined plans for five EVs and eight hybrid models as part of its India strategy.
A larger product portfolio naturally requires more manufacturing flexibility, particularly if Hyundai intends to serve both India and export markets from the same plants.
SUVs, MPVs and EVs Could Be Produced at Third Plant
The proposed new manufacturing site could reportedly produce future:
Mid-size SUVs
MPVs
Electric vehicles
Export-oriented models
Product allocation has not been finalised, but these segments align closely with Hyundai’s expected portfolio expansion through the end of the decade.
SUVs already contribute close to 70% of Hyundai’s domestic sales, reinforcing the importance of SUV manufacturing capacity for future growth.
Sanand vs Chhatrapati Sambhaji Nagar
Both locations reportedly under consideration have established automotive manufacturing ecosystems.
Sanand, Gujarat
Sanand has developed into one of India’s important automotive and manufacturing hubs, supported by strong road infrastructure, supplier networks and access to Gujarat’s ports.
For Hyundai, port connectivity would be particularly important given the company's plans to expand exports from India.
Chhatrapati Sambhaji Nagar, Maharashtra
Maharashtra already has a well-developed automotive supplier ecosystem and Hyundai is establishing another major manufacturing base at Talegaon.
A second manufacturing investment in Maharashtra could potentially allow Hyundai to take advantage of an established supplier network and logistics infrastructure.
The final choice is expected to depend on factors including:
Land availability
State-government incentives
Supplier ecosystem
Logistics costs
Port connectivity
Infrastructure
Long-term expansion potential
Hyundai could also evaluate additional locations before reaching a final decision.
India Becoming More Important to Hyundai's Global Strategy
India is already one of Hyundai’s largest global markets, but its importance goes beyond domestic vehicle sales.
Hyundai intends to use India increasingly as a manufacturing and export base. Approximately 30% of future India production could eventually be exported, according to Hyundai's broader manufacturing strategy.
Hyundai has also highlighted India's cost competitiveness. At its 2026 CEO Investor Day, Hyundai said its cost position in India was more than 15% better than its global baseline, strengthening the case for additional localisation and manufacturing investment.
Production Already Being Increased in 2026
Capacity requirements are not only a long-term issue.
Hyundai reportedly raised its CY2026 production plan from around 7.7 lakh vehicles to approximately 8.2 lakh units, an increase of nearly 50,000 vehicles.
Demand for models such as the Creta and Venue, improving rural sales and additional volumes from upcoming SUVs are understood to have contributed to the increase.
This provides an early indication of how Hyundai’s broader product offensive could progressively place greater pressure on its manufacturing network.
Auto Punditz View
Hyundai’s reported search for another manufacturing location should be viewed as a long-term capacity planning exercise rather than confirmation of an immediate new factory.
The Chennai and Talegaon facilities can support Hyundai’s requirements over the next few years, particularly as Talegaon gradually moves towards its full production potential.
The bigger requirement emerges closer to 2030.
Hyundai is simultaneously preparing more SUVs, EVs and hybrids, increasing localisation and positioning India as a larger export hub. If those plans translate into the expected volumes, production capacity exceeding the roughly 10.74 lakh units planned from Chennai and Talegaon would eventually become necessary.
A third manufacturing base capable of adding another 5 lakh vehicles annually would potentially take Hyundai India's manufacturing capability to well above 15 lakh vehicles per year once fully developed.
That would represent a significant expansion from Hyundai’s present footprint and underline India's increasingly important role within the Korean manufacturer’s global operations.
For now, Sanand and Chhatrapati Sambhaji Nagar should be treated as locations reportedly under evaluation, rather than confirmed Hyundai manufacturing sites. The eventual investment decision will depend on market growth, utilisation at Chennai and Talegaon and the success of Hyundai's next generation of products.
