Small Car Exports up 22% Despite Weak Sentiment.

In a surprise development for the market, export of small cars have shown a strong growth of 22 per cent during the first half of the present financial year amid weakening market demand in the Euro zone. Interestingly, the increased focus on the non-European market for “Made-in-India” small cars is also aiding the export growth, indicating country’s growing stature as a manufacturing hub for small cars.

While domestic sale of small cars (micro, mini and compact segments together) reported a decline of about six per cent at 703,802 units during April-September 2011, export of small cars registered a growth rate of 22 per cent at 241,848 units, against 197,761 units in the same period previous year.

Hyundai continues to be the major car exporter from India selling 116,146 units of “made in India” small cars across the globe during the first quarter of this financial year, followed by Maruti Suzuki which exported only about half of Hyundai’s exports volumes. Maruti, which has been facing labour disruptions to its production, saw its exports fall 20 per cent at 59,625 units during April-September 2011 when compared with 74,779 units last year though the company had significantly increased its exports to the non-European markets.

“Maruti’s export volume at 6,749 units (against estimates of 10,500 units) in September de-grew by 47.5 per cent Y-o-Y (53 per cent month-on-month). Decline in exports was due to labour trouble at Manesar plant. Export contribution to overall volumes expected to fall to about 10 per cent in FY12 from 14.5 per cent in FY10 of the company,” according to a report byMotilal Oswal Securities.

Hyundai, which is projecting lower volumes in European markets in the coming months, saw only a marginal growth in exports when compared with 114,953 units in a year ago period. It exports in large volumes to non-European markets too.

According to the European Automobile Manufacturers Association, car registrations were 1.1 per cent down at 10,121,423 units in the EU during January-September period when compared with the same period the previous year.

Though the two large exporters — Hyundai and Maruti — are struggling to increase exports due to huge domestic demand and labour issues respectively, Ford and Nissan, which started selling their ‘Made in India’ small cars outside India last year, have been significantly increasing their exports, thereby driving growth for overall small car exports from India. Nissan exported about 49,723 units of its Micra during the April-September 2011, while Ford’s exports of Figo grew over three times at 12,105 units when compared with 3,474 units last year.

About 85 per cent of Nissan’s exports are going to various countries in Europe, seven per cent to South Africa, four per cent to West Asia and North Africa and the rest is to Turkey, Asia and Latin America. “Our order book from the European market is still strong and the impact of slow down in Europe will be felt only after a few months as it takes a couple of months for the locally-made cars to reach the markets in Europe,” a Nissan official told Financial Chronicle.

Ford India’s major portion of small car exports is directed at several non-European markets and it presently exports Figo to about 30 countries. “Exports are a strong part of our growth strategy and there has been ever-growing demand for the Chennai-built Figo outside India,” said Michael Boneham, MD, Ford India.

Source : mydigitalfc.com