MUMBAI: The country’s two largest carmakers Maruti Suzuki and Hyundai Motor India are looking to revive their exports after years of neglecting that market to make up for a fall in domestic demand.
Maruti Suzuki and Hyundai, which together account for twothirds of the Indian passenger vehicle market, saw their export volumes fall by 28% and 43%, respectively, in the last decade when they doubled down on domestic sale push as India emerged one of the fastest-growing global car markets, letting exports stagnate.
Maruti, which exported 147,000 units in 2009-10, shipped 106,000 units in the last fiscal while Hyundai, whose exports peaked at 285,000 units in 2009-10, shipped around 160,000 in 2018-19.
But now they are looking to push exports, along with other carmakers including M&M .
“Not only does it (exports) help increase total volumes, it’s a natural hedge against currency fluctuations,” said RC Bhargava, chairman of Maruti Suzuki. “However, it’s not possible to quickly increase or decrease exports. Over time we will increase exports,” he told ET.
SS Kim, managing director at Hyundai Motor India, said, “We have a flexible manufacturing facility wherein we are able to balance out production plans for the domestic and export market.”
The South Korean carmaker was India’s top exporter of cars until a few years back. But eventually it shifted most of export production out of the country and started shipping vehicle kits as new capacities went into satiating local demand.
With domestic market plunging in recent months, carmakers are now looking at ways to boost exports by identifying new markets or setting up local assembly operations.
Bhargava said, “Being a small carmaker, for us Africa can be a potential market.”
Maruti Suzuki, which sells every second car sold in the local market, has exported over 1.86 million passenger vehicle units cumulatively. Baleno, Dzire, Swift, Celerio and Alto are exported to over 100 countries. Latin America accounts for 27% of its exports, followed by Asean (16%) and Africa (15%).
Hyundai exports to around 91 countries across Africa, the Middle East, Latin America, Australia and Asia Pacific.
VG Ramakrishnan, founding partner of consulting firm Avanteum Advisors, said India trails many other countries in vehicle exports. “Mature markets have a minimum of two brands leading the globalisation drive,” he told ET. “India is an exception; we have no homegrown companies to lead the exports drive.”
This helped overall passenger vehicle exports from the country grow 52% to around 670,000 units in the last decade.
“Ford, GM, VW and Nissan, which together have a combined 5% share in the domestic market, contributed over 50% of the exports in 2018-19,” said Arun Malhotra, former MD at Nissan Motor Corporation (India).
Domestic vehicle maker Mahindra & Mahindra is looking to push exports by setting up offices with local partners in many new markets. “We are much more aggressive in having local offices, in terms of liaison offices or manufacturing bases,” said Arvind Mathew, chief of international operation at M&M.
“Today, by expanding our local footprint (offices, assembly, distribution network), we are able to identify, local customer/government requirements quickly.”
M&M is building plants in North Africa, South East Asia, East Africa and Central America. The goal is to take exports footprint from 8% of the business to 20% in the coming five years, with 10 local or liaison offices, company officials said. Over the years, the exports demand has been gradually shifting from small cars to mid-size cars and SUVs. According to Kim of Hyundai, today the compact segment accounts for 53% of its total exports followed by SUV and mid-size cars.