To decline in the current fiscal for the second consecutive year.
By Pritish Raj
Exports of passenger vehicles from India are set to remain in the negative for the second consecutive year during the current fiscal, with some automakers hit by stringent import regulations of several countries, even as others are focusing on the domestic market.
For the first time in seven years, passenger vehicle exports declined by 1.51% year-on-year during FY18, mainly impacted by lingering effects of pending GST refunds to the tune of `1,000 crore. Within the PV segment, passenger car exports in FY18 declined by 3.8%. Before FY18, the last time exports were down was in FY11, when shipments fell by 0.4%.
“There are markets like Sri Lanka, Indonesia and Nepal that are pressing the automakers to build a CKD (completely knocked down) plant in their countries, which require investment and, therefore, discourage companies,” said Rajan Wadhera, automotive sector president, Mahindra & Mahindra.
Exports during April-December FY19 witnessed a y-o-y decline of 8.47% and with just two and half months left for the fiscal to end, analysts believe shipments would remain sluggish as one quarter alone cannot pull up the numbers.
“While some countries have asked for more investments and to create local jobs in the form of CKD plants, others have increased the import tariffs, making exports slightly less viable for the automakers,” Society of Indian Automobile Manufacturers deputy director general Sugato Sen told FE. “Come and add value, not just sell CBUs (completely built units) is what the countries across Africa are saying,” he added. As per Siam data, the worst hit are the passenger car exports, which fell 10.85% y-o-y in the April-December period of the current fiscal.
Exports of utility vehicles slumped by 1.35% y-o-y.
Major car makers, including Maruti Suzuki, Toyota, Ford India and Volkswagen India, reported a double digit fall in exports during the April-December period. While Maruti Suzuki reported 13.89% y-o-y decline in shipments, Toyota’s exports fell by 43.56% y-o-y. Ford India, which is the second largest exporter, also posted a 11.45% y-o-y fall in exports during the period. Volkswagen India’s shipments fell 33.78% y-o-y.
The country’s largest exporter of passenger vehicles, Hyundai Motor India reported a marginal 5% y-o-y rise in exports in April-December period. The company has reportedly slashed down the number of countries it exports to, from 120 to around 85 and caters to other markets through its factories in Turkey and Czechoslovakia.