India – An Expert in Exports!
A look at India’s top Automobile OEM Exporters.
Based on the investments for capacity expansion from Auto OEM’s two years back (http://management-punditz.blogspot.in/2012/03/investomania-list-of-investments.html), the team at Management Punditz had predicted that the India will slowly emerge as an Export Hub. The country is currently looking at a manufacturing capacity of 30-35 lakh passenger cars per year and the OEM’s can leverage this capacity only exporting their models to other countries / continents. India is also in the race to displace Thailand as the Global Auto Hub by 2020.(source).
While the local market is going through a tough time, these OEM’s can leverage on their manufacturing base for exports. The best example here is Nissan – The Japanese manufacturer exports upto 70% of its production! While the company is fighting hard to gain ground in the Indian market, it is effectively utilizing its resources to leverage on the demand elsewhere. Many auto OEM’s have jumped the bandwagon to start or even increase exports from the sub-continent. ‘Make in India’ campaign is adding blitz to the process and is trying to attract even more OEM’s to start exporting from India. But can India prove its competitive edge – We still are behind in terms of liberalizing our policies and our taxation structure is inconsistent. Our manpower unions just add to the woes. Sustaining profits and supportive policies by Government will the key for the growth. We yet face many challenges here (see why Mercedes Benzopts out for using Indian operations for exports and exports on decline).
See segment-wise Top exporters based on Apr’14 to Nov’14 data –
The Passenger Car makers which was under pressure in domestic market underwent a tough time in Exports as well and witnessed flat YoY growth. Hyundai saw a double digit degrowth as it deliberately stopped exporting its popular i10 and i20 models from India to Europe (source) and is using Turkey as its base for supplying the cars to European market. Even Renault has shifted exports to Romania to export RHD Dusters and particularly use Indian output for domestic requirement (source). However, automakers such VW & GM are strongly exploring Exports as an option to leverage on its un-utilized manufacturing capacity. Many European, African & South American countries are catered from India currently. Exports allow the OEM’s to better their overall profitability and manage their operations much better.
Trivia: Exports contribute near to 20% of overall production of passenger cars.
Note: Exceptional performance of Volvo-Eicher and initiation of exports of Piaggio.
Trivia: Exports contribute near to 12% of overall production of commercial vehicles (LCVs/MCVs/HCVs).
Note: Atul betting big on exports. Bajaj makes a benchmark performance and the export volumes are just envious! TVS follows the suit and the export volumes is considerable. Piaggio recognizes the opportunity and sees a good growth.
Trivia: Exports contribute near to 42% of overall production of three wheelers!
Note: Bajaj proves again what makes it India’s most profitable OEM and sets a benchmark in 2 wheeler exports as well. Hero posts one of the highest YoY growth and depicts its plan for international markets.
Trivia: Trivia: Exports contribute near to 14% of overall production of passenger cars.