India's second-largest car-maker, Hyundai Motors, has evinced interest in setting up a new manufacturing facility in Gujarat and its officials have already visited a prospective site at Dholera at the invitation of state officials.
"A delegation from Hyundai Motors have visited a site in Dohlera 10 days ago, as suggested by our department, for their new plant," a top state Industry Department official said on condition of anonymity.
"After the site visit, they have shown interest in setting up the plant here, but nothing is final yet," officials said.
The company officials that visited Dholera will now submit their recommendations to the company board for a final investment decision in this regard, he said.
However, Hyundai is keeping its options open and might explore other states for setting up the proposed manufacturing plant.
Dholera is a Special Investment Region (SIR), spanning 80,000 hectares and falls near the Delhi-Mumbai Industrial Corridor (DMIC). It is located just 90 km from Ahmedabad and will also house the state's second international airport.
Hyundai Motors had on Monday announced it will invest Rs 400 crore over the next three years to set up a diesel engine manufacturing plant in India, with an installed capacity of 1.5 lakh units per annum. The plant is expected to go onstream by 2013-14.
At present, the company imports the diesel engines for models such as the 'i20' and 'Verna' from Korea. Once the proposed new plant is set up, the company will no longer have to import these engines, which could be reflected in prices.
Hyundai Motors already has two manufacturing plants in India, both of which are located at Sriperumbudur, in the state of Tamil Nadu. It is also looking at expanding production capacity at these facilities by next year.
The company also plans to roll out three new models in 2011. It sold 5.6 lakh units in the domestic market in 2009 and is targeting a sales volume of 6.3 lakh units in 2011.
Recently, another car-maker, Ford, had also evaluated the prospects for setting up its second manufacturing facility in the country in Gujarat, as it gears up to introduce eight new products by 2015.
The Gujarat government has been projecting the state as a favourable destination for auto-makers ever since Tata Motor relocated its Nano plant from Singur, in West Bengal, to Sanand in 2008.