Prospects of a double-digit growth in the domestic passenger vehicles market in the current financial year look uncertain after demonetisation but a stronger growth story in the export market seems intact. Passenger vehicles (cars, vans and utility vehicles) exports are on track to hit a new record in FY17, as shipments continue to post strong double-digit growth.
In the first eight months of FY17, exports have grown about 16 per cent to 499,037 vehicles, against a growth of 9.84 per cent in domestic sales volume (to two million units) of companies. In the corresponding period of FY16, exports had grown by only 4.3 per cent. Export volumes could cross 700,000 units for the first time in a year on the back of a sharp surge in numbers from companies such as Ford, Volkswagen and General Motors. India exported a record 653,889 vehicles in FY16, growing only about five per cent over the previous year. Latin America, Africa and Europe are top export destinations for India-made cars.
A double-digit growth in exports is seen after three years. Hyundai, the largest exporter, also posted a four per cent growth and shipped almost 119,000 vehicles in the first eight months of the financial year. “With India becoming a stage for the launch of more and more global models by automobile multinationals, these models are presenting an opportunity for export to non-manufacturing markets,” said Rakesh Srivastava, senior vice-president (sales and marketing) at Hyundai.
Like the domestic market, growth in export volume is being driven by the utility vehicles (UVs). UVs exports have surged 48 per cent to 107,916 units in April-November period. Hyundai exported 33,308 units of its popular sports utility vehicle Creta in April-November period this year against 3,866 units in the corresponding period last year (the vehicle was launched in July 2015).
Ford, the second-biggest passenger vehicle exporter after Hyundai, maintained the export volumes of EcoSport at about 57,000 units in first eight months. M&M also reported an increase in exports of Scorpio and XUV500. Against the 48 per cent growth in UVs export, export of cars has grown 9.5 per cent. India exported 389,189 cars in the April-November period. New models like Creta and Baleno helped growth in shipments of UVs and cars, respectively. Maruti Suzuki has exported over 28,000 units of Baleno this year.
Among the companies, largest volume addition has come from General Motors. It has shipped 43,015 vehicles in April-November period, registering a 240 per cent growth over last year. India is fast becoming a major export hub for a number of manufacturers and GM India is no exception, Kaher Kazem, president and managing director, GM India said last month. GM India, like Volkswagen, Ford and Nissan, sells more India made vehicles outside than in the country.
Srivastava said the rising volumes in the domestic and export market is improving the economies of scale of companies and making the country a more competitive base for export of quality products.