Hit by currency fluctuations and sagging domestic demand, automobile majors have started shipping out sedans and utility vehicles from India, a country that has been traditionally identified 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 the sedan, DZire, and multi-utility vehicle, Ertiga.
A senior executive at MSIL said, “Exports are a natural hedge against adverse forex fluctuations. We aim at substantially growing sales abroad to counter our rising import bills. As we reach out to more markets, we start diversifying our product mix. We have recently started shipping sedan DZire to Africa, and are assembling Ertiga in Indonesia.”
While the company ships 4,000-8,000 knocked-down units of the Ertiga to Indonesia, based on demand from the south Asian market, DZire now accounts for 13 per cent of its exports. The company has sold 6,191 cars of the sub-four metre DZire abroad since starting exports in May.(VROOMING ABROAD)
“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 bigger cars”, said V G Ramakrishnan, senior director (automotive and transportation), Frost & Sullivan.
In the current financial year, Toyota Kirlorkar Motor (TKM) is looking at exporting 22,000 cars of the Etios series to Africa. Meanwhile, German auto major Volkswagen (VW) is exploring possibilities of shipping left-hand drive versions of sedan Vento. VW exports Vento to South Africa and Malaysia. Nissan India, which has relied heavily on small car Micra for exports, too, has diversified its exports basket with sedan Sunny. The company has exported 12,567 units of Sunny between April and August, making up 35 per cent of its sales abroad.
Abdul Majeed, partner (automotive practice), Pricewaterhouse Coopers added, “Some of the export markets do not have the volumes to justify setting up a manufacturing or assembly plant. India is a low-cost manufacturing hub, and automobile makers are leveraging it as a base to grow in the derivative markets.”
Majeed’s view is reflected in the exports strategy of Renault India. The company is planning to ship 1,000-3,000 cars of the newly-launched compact sports utility vehicle Duster to the United Kingdom.