New Delhi: Faced with a fall in exports to Europe, Hyundai Motor Co.’s Indian subsidiary, the country’s largest car exporter, is looking to newer markets to make up for lost volume.
Hyundai, which exports to 110 countries from India, plans to add 10 new markets this year.
On Monday, the company shipped the first consignment of its premium i20 small cars to Australia. It also plans to export to Russia, New Zealand and Vietnam later this year.
In 2009, Hyundai, along with Maruti Suzuki India Ltd, the country’s largest car maker, benefited from scrappage schemes announced by various European governments.
Changing lanes: A view of Hyundai cars parked at the Chennai port. Hyundai exports to 110 countries from India. R Senthil Kumar/PTI
The schemes encouraged scrapping of old cars in exchange for a rebate of €1,000-2,500 (Rs62,900-157,250) on the purchase of fuel-efficient small vehicles.
But governments are ending these schemes as economies recover.
“As scrappage schemes wind down, I expect several car makers to target markets like Australia and South Africa as they have low small-car penetration,” said Abdul Majeed, automotive practice leader at audit firm Pricewaterhouse Coopers Llp.
Maruti has said it plans to export 140,000 cars this fiscal, up from 70,022 in the previous year. Hyundai’s exports rose 75% to 253,345 in 2008-09.
Hyundai ships an average of 25,000 cars to Europe every month. Export orders are usually placed three months in advance and the company has begun to see a drop in orders.
“We should see a fall of between 20% and 30%,” said Arvind Saxena, director sales and marketing, Hyundai Motor India Ltd. He sees exports to Australia at 15,000 units a year in the calendar year.
Another bright spot for Hyundai is the southern African market. Hyundai India has seen sales to this region rise to 3,000 cars a month in 2009 from just 200 a month 10 years ago.