India enhances its repute in auto exports

MUMBAI: India is emerging as an export base for mid-size cars, SUVs and engines as it builds on the image as a key supplier of small cars. India-made Vento sedan is one of Volkswagen's top selling models in Mexico. According to people in the know, Hyundai Motor, the biggest auto exporter from India, is considering exporting its new generation mid-size Verna, codenamed HCI, from next year. Creta SUV from Hyundai's Chennai factory has also got acceptance abroad.  

Premium brands like Chrysler and Land Rover, too, are considering exporting vehicles made in India to right-hand-drive markets, said people with knowledge of plans. Ford Motor will start exports of EcoSport SUV to North America from here next year, while the Suzuki BSE -1.24 % Baleno hatchback is supplied to Japan by the company's Indian unit, Maruti Suzuki BSE -1.24 %.

With Indians increasingly opting for bigger cars and local quality standards similar to those abroad, it has become easier for manufacturers to pick models for exports from India, said Gaurav Vangaal, senior analyst for forecasting at IHS Automotive. Exports allow them to post "better operational performance domestically due to combined volumes of domestic (sales) and exports," he said.

India is already a key exporter of the likes of Hyundai's Grand i10, Ford Ka and Chevy Beat. For some global automakers, such as General Motors and Nissan Motor, exports have helped offset weak demand in the Indian market. Hyundai is looking to ship about 11,000 units of the next gen Verna from India in 2017 and take it to 70,000 by 2019-2020, said three component suppliers to the local unit of the South Korean carmaker. Indian manufacturing will ease production load on its Korean operations, allowing it to use the factories there to increase the production of  Elantra and Sonata which are in demand in its home market. 

"We are planning to make a new version of the Verna next year in the second half. India is one of the countries which will see increase exports of Verna," Hyundai Motor India managing director YK Koo told ET. "Volume for Verna exports is yet to be finalised, but it will be significant," he added.

The Hyundai Creta has a one- to two-month waiting period in overseas markets, Koo said. "We are exporting 5,000-6,000 units a month,the numbers of mid-size cars will go up with new model."

Apart from fully built cars, vehicle makers plan to source engines from India. Ford India is set to begin exports of 2- and 2.2-litre Panther engines from its factory at Sanand in Gujrat from 2017-18. Its plan is to produce 2 lakh engines at Sanand and export to all over the world. Panther engines will be supplementing a new range of smaller petrol engines, internally named Dragon, which will power the next gen Figo and Aspire cars. A Ford India spokesperson said as a policy, the company does not comment on speculations on products or manufacturing plans.

Exports of cars longer than 4 metres accounted for 20% of total exports of 6.5 lakh vehicles in fiscal 2016 — the share has more than doubled in three to four years. If vehicles like Toyota Etios and EcoSport are included — these are slightly smaller — mid-size segment will account for almost 30% of India's total car exports. 

Experts say though the domestic market share for many MNCs has remained modest, it is the export strategy which has help them justify big capital investments and break even in India with economies of scale.

Source : India enhances its repute in auto exports