According to the latest Society of Indian Automobile Manufacturers (SIAM) data for the April-July period this fiscal, car exports were down 5.02 per cent to 1,71,274 units as against 1,80,332 units in the year-ago period.
"Today Indian export of cars is reorienting. 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 it would take time to recover from the loss incurred in Europe and neighbouring countries.
Already, India's largest car exporter Hyundai 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 Czech Republic.
The move will result in around 25 per cent reduction in overseas shipments from the company's Chennai plant this year at 1.9 lakh units compared to 2.53 lakh units last year. The company accounted for 45 per cent of the total 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 could be the loss, SIAM Deputy Director General Sugato Sen said: "We could have exported USD 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 USD 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 USD 34 billion.