Hyundai: Driving Indian growth
Foreign investors’ appetite for Indian securities is driven by a significant increase in confidence levels in the Indian economy. According to the Lausanne, Switzerland-based International Institute of Management Development (IIMD), India’s competitiveness has soared over the past year. It is now 29th in the IIMD’s list of 61 countries, up from 39th last year. The rankings for 2006 are based on 312 criteria including government efficiency, business efficiency, infrastructure and economic performance.
Both the country’s growing competitiveness and its improving economic climate are beginning to translate into investment action from a host of global corporations. Korea’s LG Electronics, for example, has announced a plan to dramatically increase the number of optical storage devices it sources from India. This expanded capacity will cater to the Gulf countries, South East Asia and LGE’s other regional markets. Currently, LGE sources $100 million worth of optical storage devices from its Indian plants and plans to double this within a year of its expanded capacity commencing operations.
Another big Korean manufacturer, Hyundai Motors, currently is one of the biggest exporters of manufactured goods from India, sourcing more than 100,000 cars from its plant located in eastern India. Hyundai recently doubled its plant’s capacity to half a million cars a year.