India has slowly emerged as a hot favorite location for Auto Makers. Its central proximity along with cheap trained manpower makes it much lucrative. The local volumes itself speaks of the glory and currently it is just a tip of the iceberg. The volumes are bound to grow multiple folds in coming few years. This has made OEM’s take the Indian ground seriously as part of their strategy. India has become important to the whole world and this is becoming like an export hub for specially small cars and components globally. Never before Auto majors have launched cars specifically for Indian consumers but now they appear to be giving immense importance to Indian market. The export volumes for the last four years, too, suggest a strong correlation with domestic demand. In years, when the domestic market has been sluggish, auto makers have been aggressive on exports and vice versa. A look on the export scenario for March 2012 –
The export volume of Hyundai & Ford speaks for itself – around 34% and 26% of overall volumes of Hyundai & Ford were exports!!! While it is clear that the Indian-origin OEMs were busy satisfying the domestic demand. No wonder why Chennai is home to major Auto Makers. Its proximity to Ennore port makes it extremely viable to set up base there. To emphasize on the scale of exports currently happening through Chennai –
1. Toyota started the export of its Etios & Liva from April’12 with the first batch of 247 units shipped on April 4 from Ennore. Toyota aims to export 20000 cars this year.
2. Nissan India has exported 85,000 cars till date, manufactured at its Oragadam facility and posted a record export of 14,403 units in January 2012. The company is planning to increase the volume of exports in 2012 and targets car exports worth Rs. 500 crore approximately.
3. Exports volume was led by the local arms of global car makers such as Hyundai, Nissan Motor Co. Ltd and Ford Motor Co., all of which have identified India as an export hub for small cars and have constantly shipped models from their factories in India
Export is now being looked as a strategic advantage for OEMs citing the volatility in the domestic demand. In the coming years I’m sure that the percentage of exports is bound to equal domestic volumes.