In order to meet the surging consumer demand for vehicles in the domestic market, auto majors are reducing exports .jpg) Consumers concerned about long waiting periods while purchasing their favourite vehicles can now heave a sigh of relief. Top auto makers in the country such as Maruti Suzuki and Hyundai Motor India Ltd, among others have decided to curtail exports, to meet increasing demand for vehicles in the domestic market. While Maruti plans to export only 15% of its total production, Hyundai plans to reduce exports by about 8%. Commenting on this move undertaken by auto makers, Asan Varyani, proprietor of Shivam Narrow Fabrics, a mid-sized manufacturer of car seat belts in Mumbai, said, “Following the Eurozone crisis, demand for vehicles in the European markets have slackened a bit, which serve as the major export destination for auto makers. On the other hand, in view of surging domestic demand, concentrating on the domestic market is sure to yield fruitful results.”
According to data from the Society of Indian Automobile Manufacturers, export of passenger vehicles rose to 4,46,146 units in 2009-10 from 3,35,729 units in 2008-09.
India’s dominant market position
Industry experts believe that the country’s strong position in the global auto market is another major reason behind auto makers targeting Indian markets. According to global rating firm Fitch, the Indian auto sector is likely to witness a sales growth of 10-12% this year with competition intensifying due to increasing penetration of global original equipment manufacturers.
“India is well on its way to emerge as the next global auto hub. Already auto companies are expanding their existing capacity to meet increasing consumer demand for vehicles, which is expected to hit its peak during the upcoming festive season. Curtailing exports at this juncture will help auto makers to better serve the needs of the domestic market,” comments Adnan Yunus, managing director of Dynamic Trading Company, a mid-sized manufacturer of automotive parts in Chennai.
Notably, despite tightening of key monetary policies by the Reserve Bank of India, domestic demand has remained positive and thereby car sales have been witnessing continuous upswing this year.
Arup Choudhury |
