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Business News/ Companies / News/  Automakers tap exports to offset loss in domestic sales
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Automakers tap exports to offset loss in domestic sales

Total exports across categories increased 2.95% to more than 4.76 million vehicles in the fiscal to 31 March
  • Maruti Suzuki, India’s leading car maker, is also planning to boost its share of exports
  • Domestic passenger vehicle sales may fall between 22% and 25% this fiscal. (HT)Premium
    Domestic passenger vehicle sales may fall between 22% and 25% this fiscal. (HT)

    Automakers in India are enhancing their focus on exports to grow volumes and partly offset any loss in domestic sales.

    This comes amid uncertainties in the local market where a lengthy lockdown to combat the pandemic and a slowing economy as well as job losses have dented consumer sentiment, affecting demand across categories. Rating agency Icra has forecast domestic passenger vehicle sales to fall between 22% and 25% this fiscal. Two-wheeler sales will decline 16-18%.

    Firms such as Maruti Suzuki India Ltd, Hero MotoCorp Ltd, Bajaj Auto Ltd and TVS Motor Co. Ltd are expected to push exports in countries that have not been significantly impacted by the pandemic. Cases of coronavirus infections in markets such as Africa and the Middle-East are still not as high as in India but challenges will remain in markets such as Latin America, where cases are on the rise.

    For instance, Hero MotoCorp Ltd, the country’s top two-wheeler maker, plans to launch motorcycle models in the 150-160cc category in the exports market, building on the momentum achieved in countries in Asia and Latin America.

    “Sharpening our focus on Africa with a bespoke strategy to build on the momentum we have accomplished among the Boda Boda riders (bike taxis in east Africa). Revive our scooters market share in Asia with the new models of Pleasure 110 and Destini 125 and deepen our financing network across markets and strengthen the momentum across Bangladesh and Nepal," the firm said in its annual report for fiscal 2020.

    Hero MotoCorp is focused on expanding its product portfolio in the premium segment with a slew of new launches in the last year-and-a-half, to compete with the likes of Bajaj Auto and TVS Motor.

    Maruti Suzuki, India’s leading car maker, is also planning to boost its share of exports. In FY20, Maruti’s exports to Africa rose substantially, helping the automaker partly compensate for lower shipments to countries in South-East Asia.

    “The company would focus on increasing export volumes by leveraging SMC’s partnership with the Toyota Motor Corp.," the Suzuki Motor Corp. (SMC) unit said in its FY20 annual report. Maruti last year began supplying select vehicle models to Toyota for sales in Africa.

    To be sure, most Indian automakers reported a decline in exports in FY20 because of an economic slowdown in several developing and developed economies, and rising protectionist measures.

    Passenger vehicle exports grew a marginal 0.16% to 677,311 units while the same for two-wheelers rose 7.3% to 3.52 million units.

    Total exports across categories increased 2.95% to more than 4.76 million vehicles in the fiscal to 31 March. In comparison, a total of 3.57 million vehicles were exported in FY15, according to data compiled by the Society of Indian Automobile Manufacturers.

    Chennai-based TVS Motor said in its latest annual report that some of the company’s export markets have seen a rapid spread of covid-19, impacting economic activity while others including in Africa saw a more limited impact of the pandemic.

    “Over the next 3-5 years, our focus will be to improve the export volumes. We plan to consolidate our export business across Africa and Latin America. We also plan to grow export shipments from our Indonesia-based unit in the coming years," Sudarshan Venu, joint managing director of TVS Motor said during the company’s annual general meeting on 29 July.

    Amit Panday contributed to the story.

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    Published: 11 Aug 2020, 07:37 AM IST
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