Hyundai Motor India Limited is taking the adage -- what cannot be measured cannot be controlled -- very seriously. In a move to control costs, it is implementing an innovative plan where the car-marker has incentivised every small idea to reduce the weight of the car it makes by offering Rs 100 for every gram saved in weight.
H S Lheem, managing director of HMIL, said that this incentive is working in the company's favour. In 2008, efforts by its shop-floor and R&D staff have helped cut the weight of its cars by as much as 380 grams. The company has a target on how much it wants to reduce the weight of its cars, but the management would not reveal that. "Reducing weight means not just lower cost of making but also better mileage for the consumer," Lheem explained.
A team of 50 R&D staff from South Korea along with their Indian counterparts are focusing on this new project called i-Project at HMIL. "The twin-objective of this project is cost-saving and weight-reduction," Lheem said. The effort of this project is not restricted to the shop-floor but extends to its component suppliers too. HMIL today has about 100 key component suppliers, 45 of whom were brought from Korea to be dedicated suppliers for HMIL.
Asked, if the Indian suppliers for HMIL have learnt from their experience in supplying low-cost parts to Tata Motors' Nano that may translate into benefits for HMIL too, Lheem said, "Maybe, they have learned from us to make the Nano."
Senior executives from HMIL who accompanied Lheem to flag off the company's first export shipment of its new car i20 from its Chennai plant, said that 2009 could be a tough year for Indian car makers. No major recovery at the retail end can be expected during 2009, they said. HMIL executives said that the company has managed to show better sales than most of its competitors in 2008. Domestic sales for the company in the first 10 months grew by 28 per cent to 2.15 lakh cars and exports grew by 83 per cent to 1.93 lakh cars.
"This is very impressive when you look at the overall industry growing at 5 per cent or so," said Lheem.
Company executives, however, added that stock estimated to be equal to a month's sales are lying at the factory and at the dealer outlets, which they claimed was not a level they should be worried about.