India, whose auto market is 19 per cent of China’s, has the edge in exports.
Suzuki Motor Cor, Hyundai Motor Co, and Nissan Motor Co are making India a hub for overseas sales of minicars, as incentives lift demand for smaller, fuel-efficient autos. Helped by cheaper labor and a surging local market, India this year overtook China in auto exports and is challenging Thailand and South Korea as an alternative production center in Asia.
“There is a worldwide shift toward fuel-efficient, compact cars,” said Jayesh Shroff, who helps manage about $7 billion of assets, including carmaker shares at SBI Asset Management Co in Mumbai. “This offers a huge potential for India and it can emerge as a leader in the small car segment.”
Maruti Suzuki India Ltd’s exports more than doubled to 79,860 this year. It aims to ship 130,000 vehicles in the year to March, 86 per cent more than last year, said Chairman R C Bhargava.
The automaker rose 0.5 per cent to a record Rs 1,554.6 at the close of trading in Mumbai today. Suzuki rose 1.9 per cent to ¥2,160 in Tokyo, while Hyundai rose 4.7 per cent to Won 112,500 in Seoul trading.
Maruti Suzuki sold a monthly record 14,847 vehicles overseas in August. India’s exports of minicars and hatchbacks gained 44 per cent between January and July to 201,138, according to the Society of Indian Automobile Manufacturers. Total exports, including vans, sport-utility vehicles and trucks, rose 18 per cent to 229,809. Cars are exported to over 100 countries, and don’t include the US or Japan.
In contrast, China’s exports slumped 60 per cent to 164,800 between January and July, according to government data. Vehicles produced in Thailand for export declined 43 per cent to 263,768, according to the Thai Automotive Club.
South Korean exports dropped 31 percent to 1.12 million units, according to the Korea Automobile Manufacturers Association. Japan, the world’s largest automobile producer and exporter, shipped 1.77 million cars, trucks and buses. Of those, 135 were minicars and 439,849 were compacts.
Besides the attraction of serving a market where three of four cars bought are compacts, automakers will favour India to set up an export base as China requires companies to form local joint ventures and India doesn’t, said Ashvin Chotai, London-based managing director of Intelligence Automotive Asia Ltd.
