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India’s export pack has an unlikely driver: The automobile sector. Passenger car and two-wheeler exporters have made the most of currency depreciation and posted significant increases in foreign sales in August, which helped them partially offset subdued domestic sales.
Hyundai Motor India, the country’s second largest car maker, posted 29 per cent growth in exports for August at 24,008 units as demand from non-European markets boosted shipments. It was this push that helped the company increase overall sales by a healthy 11.58 per cent even as its domestic sales grew less than 1 per cent. Rakesh Srivastava, senior vice-president, sales and marketing, Hyundai Motor India, said, “Exports have shown decent growth on account of strong demand from non-European markets. The domestic market continues to witness pressure.”
Exports of Maruti Suzuki, the country’s largest car maker, nearly trebled during the month to 11,305 units, an increase of 181 per cent compared to 4,025 in the same month last year. Maruti Suzuki Chairman
R C Bhargava said, “It is a welcome sign that exports have done well. I hope it stays that way.” Bhargava had earlier said the devaluation of the rupee helped the company export more but cautioned that global markets were not buoyant either.
The depreciation of the rupee by over 25 per cent from January has helped auto companies improve margins on exports substantially. Bajaj Auto, India’s largest exporter of two- and three-wheelers, reported an increase of 10 per cent in exports at 144,160 units even as overall sales remained 9 per cent down during the month. The market leader in most of the big African markets earns twice as much on a motorbike exported as it does in the domestic market, according to a senior executive. Rajiv Bajaj, managing director, says margins have improved as export prices have not been slashed to boost volumes.
Chennai-based TVS Motors posted export growth of 53 per cent to 27,425 units in August as against 17,934 in the same month last year. That saved the day for the company as its domestic sales fell 6.2 per cent. Exports now account for 18 per cent of its total sales as against 12 per cent in the corresponding month last year.
Yaresh Kothari, analyst, Angel Broking, said, "The long-term plan will be to benefit from increasing exports. The outlook for the coming months will be of growth from festival demand.” Domestically, the car and utility vehicle segment grew just 7 per cent in August at 165,447 units sold by the top eight companies, and that too because Maruti Suzuki's numbers benefited from a low base due to a factory lock-down in August last year. Maruti Suzuki reported a rise of 52 per cent in domestic sales during August at 76,018 units. Its July sales stood at 75,145 units. The sales of Hyundai Motor India remained flat at 28,311 units in August as against 28,257 in the same month last year.
Tata Motors, which does not have substantial exports, reported a fall in sales to nearly half in August at 11,564 units from 22,311 in the same month last year.
