In a sign of its growing stature in car manufacturing, India is emerging as an export hub of global auto firms not just for small cars but also for big cars such as mid-size sedans and utility vehicles (UVs). Export of big vehicles has been on the rise as an increasing number of global brands are now selling India-built sedans and UVs in other markets.
During April-November 2013, exports of sedans reported a growth of 29 per cent at 77,987 units when compared with 60,512 units in a year-ago period. Share of big cars in total car exports has increased to 21 per cent from about nine per cent in March 2012.
Export of entry-level sedans (include Hyundai Accent, Maruti Swift Dzire and Toyota Etios sedan) and mid-size sedans (Nissan Sunny, Volkswagen Vento and Ford Fiesta, among others) grew by 28 per cent and 31 per cent, respectively, during the period.
In 2012-13, exports of these vehicles more than doubled at 91,478 units when compared with 43,903 units in the previous year, according to statistics of Society of Indian Automobile Manufacturers (SIAM).
“Sedan and UV exports from India have indeed been showing a rising trend. Manufacturers have ramped up their capacity for these vehicles due to the increasing domestic demand and have also concurrently started focusing on exports to optimally utilize their capacities,” Ajay Srinivasan, director, CRISIL Research, told The Hindu.
“While it is little early to say that India has started establishing itself as a manufacturing base for high-end cars, we do visualize the strong growth in sedan and UV exports to continue. The same factors that have made India an attractive small car manufacturing hub – huge size of the domestic market giving economies of scale in manufacturing, strong growth potential, and ample availability of labour and engineers – make India a potent force in the exports of high-end cars as well,” he added. The biggest start was provided by Nissan when it started exporting India-built premium sedan Sunny in January 2012. Nissan has been shipping Chennai-built both hatchback Micra and Sunny to various markets.
Europe’s largest car maker Volkswagen has also been selling ‘Made in India’ Vento across three continents. Recently it started shipping the cars to Mexico, which will become the single largest export market for Volkswagen India.
Along with sedans, UVs are also scripting a success story with their exports increasing to 23,556 units from 4,793 units during April-November 2012 period. . Currently, Renault is the largest UV exporter from India, followed by Ford and Mahindra & Mahindra.
Both Renault and Ford have drawn up major export plans for their premium compact SUVs Duster and EcoSport, respectively. Chennai-built Ford EcoSport is being sold in 10 markets. While India’s small car export story is intact, export of bigger cars is also expected to grow strongly as the global OEMs have started realising that vehicles produced here can be sold anywhere in the world, competitively. Mr. Srinivasan also believes that increasing number of car makers would get into exports of high-end cars from India in the future. “Focus on exports also helps manufacturers better manage downturns in the domestic market,” he added.