India’s top two car makers, Maruti and Hyundai, are expected to keep the growth momentum (albeit low single-digit growth) in passenger vehicle (PV) exports for the calendar year 2023 amid improving macro-situations in some markets and the easing of supply chain challenges.
For the January–October 2023 period, total passenger vehicle (including utility vehicles and cars) exports stood at about 5.56 lakh units, of which cars accounted for 3.48 lakh units (about 63 per cent), while SUV exports were at 2.08 lakh units. In 2022, total PV exports stood at 6.45 lakh units.
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With the current trend in exports, the PV segment is expected to end this calendar year with total exports of about 6.5–6.6 lakh units, which will be marginally higher than the shipments in 2022.
But total exports of 6.6 lakh units will be much lower than the peak shipments of 7.4 lakh units (cars accounted for 79 per cent then) achieved in 2017.
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Major drivers
Currently, Maruti Suzuki India Ltd., the largest PV exporter from India, and Hyundai Motor India Ltd. are the major drivers of India’s total PV exports.
Of the total PV exports of 5.56 lakh units during the January–October period, Maruti accounted for about 2.17 lakh units, while Hyundai’s share was about 1.34 lakh units. These two account for about 63 per cent of PV exports. Other PV exporters, such as Kia and Nissan, have seen a decline in exports this year, while Volkswagen and Toyota have seen a rise in shipments this year.
The pandemic and associated impact pulled down India’s PV exports from 7 lakh plus in 2019 to 4 lakh plus in 2020. While shipment of India-built cars and SUVs has been gradually increasing year-on-year since 2021 in the post-COVID period, expansion to more markets by PV OEMs and the launch of more SUV models have also boosted the export opportunities.
Maruti has seen a good increase in exports over the past two quarters. Its exports grew by 9.7 per cent in the September 2023 quarter when compared with the year-ago period. “New SUV models, such as the Grand Vitara and Fronx, are also contributing to growth in export volumes. Recently, the company further expanded its product portfolio for exports with the start of exports of 5-door Jimny. The vehicle will be shipped to destinations in Latin America, the Middle East, and the Africa region,” the management of Maruti said during its recent earnings call.
Maruti’s top three selling models in the export markets include the Baleno, Dzire, and S-Presso, and the company is exporting its vehicles to about 100 countries across the world. While the demand situation is very dynamic in some export markets, the company will continue to focus on Africa, Latin America, Southeast Asia, and even the Middle East, it said.
Going forward, Maruti plans a 3-fold increase in its export volume as it targets shipments of 750,000–800,000 units per year by 2030–31.
Apart from the global economic situation and other issues, the shutdown of the 3-decade-long production of Ford in India also had an impact on PV exports. The US carmaker, which announced its exit from India in September 2021, was one of the leading PV exporters from the country as it made its Indian operations a hub for exports to certain markets. It had built a large production base with a capacity to produce 4.4 lakh units a year.
For a very long period, Ford was selling more India-built cars outside India than in the domestic market. Huge losses, poor growth in India, and tightening of regulations in its key export markets were cited as reasons for winding up operations in India.