Car, two-wheeler exports soar in FY22 amid chip crunch, falling rupee

Shipments of Maruti Suzuki and Bajaj Auto vehicles see record jump

Overseas shipments at auto firms expanded at a brisk pace year-on-year in March bumping up the overall annual exports for FY22 and taking it to a record level for some like Maruti Suzuki India and Bajaj Auto.

Amid a semiconductor shortage, a depreciating rupee and a strong demand in various export destinations, passenger automakers diverted capacity meant for the local market in favour of the more lucrative export markets.

Among the PV makers, car market leader Maruti Suzuki led the rally with its overseas shipments touching the record level of 2,38,376 units in FY22—the highest for the company in any financial year.

“This is a hump and may not last,” said Puneet Gupta, director at S&P Global Mobility & Automotive forecasting. "Since the start of the pandemic when the supply chain disruption triggered the semiconductor shortage, passenger vehicle makers have been favouring the more profitable export markets over the domestic market."

Owing to the chip shortage, the domestic car market in India has seen the demand far outstripping the supplies for a year and half now with waitlists for some models stretching up to a year.  

Mexico, South Africa, Saudi Arabia, the US and Australia are some of the export destinations for PV makers from India. Mexico is the biggest market followed by Australia, said Gupta.

The Indian rupee has been weakening against the international currencies due to the ongoing geopolitical tension.  It is an opportunity for the auto companies to push exports and offset headwinds including high commodity prices to some extent, said an analyst at a brokerage.  

In contrast to a 7 percent year-on-year decline in the domestic market in the month of March, exports at Maruti rose to 26,496 units, clocking its highest ever monthly exports.

“About two years ago, we decided to mount a strong effort towards a quantum increase in exports,” said Rahul Bharti, executive director, corporate affairs at  Maruti Suzuki India adding that “this ambition was also inspired by the two-pronged strategy” of the government to deepen localisation and multiply exports, as part of the overall “Make in India” vision.

With the strong support of its parent Suzuki Motor Corp, Maruti worked on all fronts. Be it expansion of export product portfolio, reaching out to more geographies and markets or expanding the distribution network.

“We were fortunate that the chip shortage had minimal impact on production of our export models,” said Bharti.  The business partnership between Suzuki Motor Corp and Toyota Motor Corp also helped in a wider customer reach, he said.

The top five export models during the year included Baleno, Dzire, Swift, S-Presso and Brezza. Latin America, ASEAN, Africa, and the Middle East were the top export destinations.

Exports also saved the day for the scooter and motorcycle manufacturers including Bajaj Auto and TVS Motor India that have been reeling under the impact of a protracted slowdown in the domestic market for three years now.  

Bajaj Auto, India’s largest exporter of two and three wheelers that sells its models in over 70 countries is estimated to have shipped a record 2.5 million units in FY22. Bajaj Auto will report its monthly and annual sales on Saturday.

TVS Motor, which too has been steadily stepping up the exports of its two and three wheelers, to offset the decline in the domestic market, saw its overseas shipments to 12,50,000 units in FY22 compared to 879,000 units in the year before.