 "In growth lane: Exports of passenger vehicles, 2-wheelers surge in 2024")
India’s passenger vehicle (PV) exports during the first 11 months of 2024 grew by 7.79 per cent to 6,64,648 units while the two-wheeler shipments to overseas countries saw a nearly 22 per cent year-on-year jump to 3,602,151units, according to data collated by the Society of Indian Automobile Manufacturers (SIAM).
India targets to export 50 per cent of its automobile production. Around 14.6 per cent of the passenger vehicles (PVs) and 16.34 per cent of the two-wheelers manufactured in the country were exported between January and November, the data showed.
Although the country has a long way to go to achieve the 50 per cent target, industry experts feel that over the next four to six years, India’s auto exports will continue to grow in double digits.
In January, commerce and industry minister Piyush Goyal said India exports roughly 14 per cent of its vehicles, asserting that the target is to take this number to 50 per cent. India surpassed Japan last year to become the third-largest automaker in the world.
“As far as exports are concerned in 2024, two-wheelers have stood out amongst all other segments with an expectation that there could be a growth of more than 20 per cent with about 4 million units, as compared with the calendar year 2023, which is primarily driven by demand in Latin America,” Rajesh Menon, Director General, SIAM told Business Standard.
“Continuing with the growth that was witnessed in 2023, the PV segment is likely to post a single-digit growth in 2024, primarily owing to the initiatives taken by car companies to introduce newer models in export markets,” Menon said, adding that this year companies have also commenced shipping vehicles to developed economies like Japan. Honda has been exporting its made-in-India Elevate to Japan where it is a run-away hit.
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India’s largest PV exporter Maruti Suzuki India (MSIL), which has cumulatively exported 3 million vehicles, is seeking to increase its exports to 750,000-800,000 units by the end of this decade.
Hisashi Takeuchi, MD and CEO of MSIL told Business Standard that 2024 was a “remarkable year” for the company.
“For the first time, despite several challenges, we exceeded 2 million production output in a year, a feat achieved by no other Indian passenger vehicle manufacturer. Our export numbers in CY2024 were equally impressive, with 2.88 lakh cars shipped out of the country between January and November. We also achieved a cumulative milestone of 3 million exports. Currently, we sell 17 models in nearly 100 countries. We plan to launch more models in our export markets and increase our export numbers to 7.5-8 lakh by the turn of this decade,” he said.
Takeuchi is optimistic about 2025. “We are excited to foray into battery electric vehicles next month with the unveiling of ‘e Vitara’, a global model manufactured in India for the world,” he said.
“While we work to give customers the confidence to adopt BEVs, our philosophy is to leverage all technologies in our decarbonisation journey. We will continue to focus on a multi-pathway approach including BEVs, hybrids, CNG, and carbon-neutral fuels such as ethanol and biogas towards a carbon-neutral society,” Takeuchi said.
“As we embark on the next phase of our growth journey from 2 million to 4 million capacity, we plan to achieve in the next 7-8 years what we accomplished in the last 40 years,” he added.
Meanwhile, the country’s largest two-wheeler exporter Bajaj Auto posted a 12.7 per cent growth in its two-wheeler exports from India during the first 11 months of the year to 1.45 million units.
Rakesh Sharma, ED, Bajaj Auto told Business Standard that despite some headwinds in the global markets, the export growth has been decent in 2024. “There were issues around currency devaluation and other economic crises in our major markets. For 2025, we continue to be cautiously optimistic. One would need to keep a watch out for the regime change in the US and what it means for India at large,” Sharma said.
Experts feel electric vehicles (EVs) are likely to become a major factor in boosting India’s auto exports.
“As the global automotive industry is undergoing a structural transformation, especially increased focus towards electrification in advanced economies, the Indian auto industry is favourably placed to leverage this transition in 2025 and beyond by looking at exporting electric powertrains in such economies, in addition to the contemporary technologies being exported to countries, including Latin America and Africa,” said Menon.
Hemal Thakkar, senior practice leader and director, Crisil said the Indian automotive industry has an inherent advantage of low-cost production which is attracting international companies (like Ford) to make this as a manufacturing base.
“If we comply with homologation and safety norms of destination countries, then EVs are a good bet for the future of Indian automotive exports. The EV component supply ecosystem in India is quite well developed, barring battery cells and a few other things. This gives an inherent advantage to India,” he told Business Standard.
Thakkar feels that the auto exports from India can continue to grow at higher single-digit to double-digit for the next few years.
However, three-wheeler and commercial vehicle exports are likely to be flat in 2024 as compared with 2023 due to some momentary disruptions like the Red Sea crisis and surging freight costs.
Thakkar also said that free trade agreements with key countries or continents (Africa and Latin America) where Indian automotive exports happen can trigger future investments by Indian original equipment manufacturers (OEMs) in creating the scale of completely knocked-down (CKD) production in those countries. India then could emerge as a major CKD kit exporter.
SIAM data reveals that players like Kia have witnessed a dip in PV exports from India during the year. During the April-November period, Kia’s PV exports declined by 58 per cent Y-o-Y as the company’s CKD exports increased, thereby changing the structure of exports (CKD over completely built units).
However, not everyone is optimistic about the potential of EV exports from India.
Kavan Mukhtyar, partner and leader, automotive, PwC feels that some macro headwinds seen in the global economy in 2024 are likely to continue in 2025.
“One has to watch the regime change in the US very closely and understand its implications on India and the currency,” Mukhtyar said. He also feels that EVs are not likely to emerge as a major growth factor for auto exports from India as the global demand for EVs is not growing at a very fast rate.