India’s car exports down 5% in April-July1 min read . Updated: 17 Aug 2014, 01:51 PM IST
Shipments to Europe have fallen and an unfavourable environment in South Asia has led to lost opportunities worth around $2 billion
New Delhi: India’s ambitious plan to become a global hub for small-car exports has taken a hit due to falling shipments to Europe, while an unfavourable environment in neighbouring countries has led to lost opportunities worth around $2 billion.
According to the latest data from the Society of Indian Automobile Manufacturers (SIAM) for the April-July period this fiscal, car exports were down 5.02% to 171,274 units as against 180,332 units in the year-ago period.
“Today Indian export of cars is re-orienting. Earlier, exports were mostly to Europe and South Asia but both are down and companies are focusing on building new markets in Latin America and Africa," SIAM director general Vishnu Mathur said.
He further said that it would take time to recover from the loss incurred in Europe and neighbouring countries.
Already, India’s largest car exporter Hyundai Motor Co. has stopped shipments from its Chennai plant to Europe after shifting production of models for the continent to the Korean auto major’s plants in Turkey and the Czech Republic.
The move will result in a reduction of around 25% in overseas shipments from the company’s Chennai plant this year at 190,000 units, compared to 253,000 units last year. The company accounted for 45% of all cars exported from India last year.
On the other hand, challenges in neighbouring countries like Sri Lanka, Bangladesh and Nepal has also resulted in lost opportunities for Indian car exports.
“In our neighbourhood, exports to Sri Lanka is barred while Bangladesh has become a second-hand vehicles market, and there is almost a similar situation in Nepal and Bhutan that has made our small car exports uncompetitive," Mathur said.
When asked how much the loss could be, SIAM deputy director general Sugato Sen said: “We could have exported $2 billion worth of cars to our neighbourhood."
The auto industry had set an ambitious target under the Automotive Mission Plan (AMP) 2006-2016 to take its annual turnover to $145 billion with special emphasis on export of small cars, MUVs, two- and three-wheelers and auto components.
However, the slowdown in both global and domestic automotive market in the last couple of years had led SIAM to announce last year that it would miss the annual turnover target by $34 billion.