Hit by currency fluctuations and sagging domestic demand, auto majors have started shipping out sedans and utility vehicles from a country which has traditionally served as a base for manufacturing small cars. Leading the pack is small car giant Maruti Suzuki (MSIL) which has made India the sole production hub for sedan DZire and multi-utility vehicle Ertiga currently.
A senior executive at MSIL said, “Exports are a natural hedge against adverse forex fluctuations. We aim at substantially growing sales overseas to counter our rising import bills. As we reach out to more markets, we have started diversifying our product mix. We have recently started shipping sedan DZire to Africa and are assembling Ertiga in Indonesia.”
While the company ships 4000-8000 knocked down units of the Ertiga to Indonesia based on demand from the south-Asian market, DZire now accounts for 13% of exports for MSIL. The company has sold 6191 units of the sub-4 metre DZire overseas since commencing exports in May this year.
“With sedans and utility vehicles increasingly gaining acceptance among consumers in the Indian market, automobile manufacturers are introducing more models in these segments. To gain the requisite volumes for producing a model cost effectively, companies have started shipping out larger vehicles from India”, explained V G Ramakrishnan, senior director (automotive and transportation), Frost & Sullivan.
In the current financial year, Toyota Kirlorkar Motor (TKM) is looking at exporting over 22,000 units of the Etios series to Africa. German auto major Volkswagen, in the meantime, is exploring possibilities of shipping left-hand drive versions of sedan Vento. VW exports Vento to South Africa and Malaysia at present. Nissan India too which has relied heavily on small car Micra for exports, have now diversified its exports basket with sedan Sunny. The company has exported 12567 units of the Sunny between April and August this year, accounting for 35% of its sales overseas.
Abdul Majeed, partner (automotive practice), Pricewaterhouse Coopers added, “Some of the exports markets do not have the volumes to justify setting up a manufacturing or assembly unit. India is a low cost manufacturing hub and automobile makers are leveraging it as a base to grow in derivative markets.”
Majeed’s contention is supported by the exports strategy outlined by Renault India. The company is planning to ship 1000-3000 units of the newly launched compact sports utility vehicle Duster to United Kingdom from India. “UK is a right-hand drive market like India. Souring the vehicle from here will enable us to leverage synergies in manufacturing”, informed a senior executive in the company.