With most European countries withdrawing their earlier incentives for buying new cars, India could see flat growth in exports of passenger cars in 2010-11, as compared to the last financial year.
Another reason is the keenness of car makers here to maintain their domestic market shares, amidst growing demand and with production facilities getting stretched. It is also possible that production of some export-specific models could be shifted out of India, as Hyundai said it planned to do with the i20..
According to the Society of Indian Automobile Manufacturers, export of passenger vehicles jumped by 32.9 per cent in 2009-10, at 4,46,146 units. Of which, Hyundai and Maruti together shipped 4,33,233 units. While exports by Hyundai Motor India went up by 12.8 per cent last year, to 2,85,658 units, Maruti Suzuki India saw its exports more than double, to 1,47,575 units.
“India has been looked at as a hub for small cars but with huge demand in the domestic market itself, leading car manufacturers are finding it tough to export a significant part out of the country, as they do not want to lose their market share here. This is expected to result in nearly flat exports this year. While Hyundai has already announced its plans for shifting the production of i20 for overseas markets to Turkey, Maruti Suzuki may do similar things later for the A-Star, as competition gets severe in the small car space in India,”said Abdul Majeed, auto analyst, Price Waterhouse.
In 2009-10, Maruti Suzuki India dominated the passenger car segment, with a market share of 50.1 per cent. Hyundai ended the year with a share of 20.6 per cent.
“The withdrawal of scrappage incentives by most European countries will affect the growth of export in the current financial year. In fact, the overall export market will be tough and it would be a challenge to retain last year’s export numbers, though we are continuously developing alternate markets that will give us a hedge against any slowdown in demand from Europe,” said Mayank Pareek, executive officer (sales and marketing), Maruti Suzuki India.
“We expect exports to be flat vis-à-vis last year, as the company is stretching capacity to 6,40,000 a year to cater to the domestic market, which is poised to grow by 12-15 per cent this year,” added Arvind Saxena, senior vice-president, Hyundai Motor India.
