India which is the fourth largest automotive market globally is also expected to play a key role as a manufacturing and export hub. While the country’s role as a global car and commercial vehicle manufacturing hub still is sometime away, the two- and three-wheeler continue to be largely exported.
But there are some challenges, especially with the strengthening of the dollar leading to a reduction in exports. In FY2023 (April 2022 – February 2023), India exported a total of 4,345,837 vehicles, a decline of 14 percent YoY, compared to 5,069,076 units for the same period last year.
The exports were mainly dominated by two-wheelers which included 3,029,006 motorcycles and 374,014 scooters, taking the two-wheeler exports to 3,406,548 units. The passenger vehicle exports came at 593,074 units, a growth of 15 percent, while three-wheeler sales came at 346,215, which declined by 25 percent.
Africa, Latin America and Southeast Asian countries were the key hubs where the vehicles were exported.
| AUTOMOTIVE EXPORTS FROM INDIA | ||||
| Apr – Feb ’23 | Apr – Feb ’22 | Change (in units) | Change (in %) | |
| Passenger vehicle | 593,074 | 515,991 | 77,083 | 15% |
| Three-wheelers | 346,215 | 461,195 | -114,980 | -25% |
| Scooters | 374,014 | 328,601 | 45,413 | 14% |
| Motorcycles | 3,029,006 | 3,753,043 | -724,037 | -19% |
| Total Two-wheelers | 3,406,548 | 4,091,890 | -685,342 | -17% |
| Grand Total | 4,345,837 | 5,069,076 | -723,239 | -14% |
According to industry sources, the strengthening of the dollar was a key factor that affected the export potential. While on one hand, there was a demand for made-in-India vehicles, but the pressure due to foreign exchange made it difficult for importers to book large volumes. On the other hand, one also has to take into account that it was in March 2022, when two-wheeler exports attained its peak.
Vinod Aggarwal, President, SIAM said, “Two-Wheelers have seen a drop in exports in the last few months, as there has been a devaluation of currencies in many destinations of exports, especially in Africa and other developing countries. These countries have been facing challenges of availability of foreign exchange, which is limiting the sales for vehicles and countries are focusing more on imports of essential items, though the demand for vehicles from consumers exists in these markets. We are hopeful that the forex situation improves in these markets soon, which will drive our two-wheeler exports since the demand still exists.“
In terms of top models exported, the TVS Star City 125, and TVS Star City motorcycles dominated the charts with 317,882 units and 207,921 units respectively. The Bajaj Pulsar, Bajaj CT 100 and Bajaj Boxer came at the third, fourth and fifth spot with sales of 136,195 units, 133,100 units and 119,696 units respectively.
Industry observers say, the decline in exports is a temporary phenomenon, and in the next few months the volumes would stabilise.
For the passenger vehicle front, there was a smart uptick in demand, and the country’s largest carmaker sees more reasons to cheer.
“For exports there is an increase on the back of several factors like preference for cost-effective personal mobility options and introduction of some new models. The increase is largely in Africa, Middle East regions specifically South Africa, Ivory Coast and Saudi Arabia,” shared Shashank Srivastava, Senior Executive Director, Sales & Marketing, Maruti Suzuki India.
Shamsher Dewan, Senior VP and Group Head – Corporate Ratings, ICRA stated that the lower base of FY2021 and pent-up demand across regions led to a strong export growth in FY2022. Two-wheelers accounted for 79 percent of all automobile exports in FY2022 due to their popularity as a cheap alternative for last-mile connectivity in undeveloped countries, primarily in LATAM and Africa as well as other nations in the Indian subcontinent, while passenger vehicle made up for 10 percent.
| TOP 10 TWO-WHEELERS EXPORTED FROM INDIA | ||||
| Model | Apr – Feb ’23 | Apr – Feb ’23 | Change (in units) | Change (in %) |
| TVS Star City 125 | 317,882 | 374,315 | -56,433 | -15% |
| TVS Star City | 207,921 | 307,162 | -99,241 | -32% |
| Bajaj Pulsar | 136,195 | 157,460 | -21,265 | -14% |
| Bajaj CT 100 | 133,100 | 89,352 | 43,748 | 49% |
| Bajaj Boxer | 119,696 | 163,828 | -44,132 | -27% |
| Yamaha FZ | 117,564 | 103,599 | 13,965 | 13% |
| Honda Navi | 97,514 | 71,730 | 25,784 | 36% |
| TVS Apache | 93,268 | 148,296 | -55,028 | -37% |
| Suzuki Gixxer | 83,608 | 64,759 | 18,849 | 29% |
| Bajaj CT 110 | 80,678 | 83,840 | -3,162 | -4% |
| Total | 1,387,426 | 1,564,341 | -176,915 | -11% |
“Two-wheeler exports in the first eleven months of FY2023 declined by 17 percent, driven primarily by global inflationary headwinds that have compelled several Central banks to raise interest rates. Customers’ purchasing power has been reduced throughout the world as a result of high inflation, civil and economic uncertainty in some countries and higher financing costs. Customers of this segment of two-wheelers are most affected by the impact on purchasing power because the majority of two-wheeler exports are in the entry-segment (75-125cc) motorcycles. Further ICRA expects two-wheeler export momentum remains muted in FY2024 with a marginal growth of 6-9 percent on account of low base in FY2023,” added Dewan.
Despite the fact that export volumes declined across segments, demand was stable for the passenger vehicle segment. The passenger vehicle segment witnessed a healthy growth of 15 percent YoY albeit a low base in the first eleven months of FY2023.
