[pqr]

FY 2023-24 | Indian car export analysis | Japanese & Korean MNCs contribute 88% | Indian MNCs only 2%!

FY 2023-24 Export Highlights

• Industry: 6,71,756 units were exported from India; the growth rate was nearly flat at 1.3%.
• Brand: Maruti Suzuki is the largest exporter, with a 42% share, followed by Hyundai at 24%.
• Body style: Sedan export share is highest at 35%, followed by 30% of hatchbacks.
• Fuel: 98% of cars had a petrol-only engine.
• Product: The Maruti Baleno (Hatchback) was the most exported car, followed by the Hyundai Verna (Sedan).
• Export-only Products: Nissan Sunny (Sedan) and Mahindra KUV 100 (Hatchback) were export-only products from India with no domestic sales.
• MNC: The combined export contribution of Japanese and South Korean MNCs was 88%, whereas the Indian MNCs was mere 2%.

Indian car export industry



Over the last three decades, several foreign car makers, starting with Hyundai and Ford in the late 90s, have established an export-oriented manufacturing base in India as a clever strategy to mitigate the risk emanating from the local demand cycle and make India one of the global hubs of automobile production.

Exports from India touched peak in FY 2016–17, at 7,58,727 units. Since then, there has been a decline in exports. In the last fiscal year (2023–24), exports were near stagnant at 6,71,756 units, with just 1.3% growth over FY 2022–23.



Since the days of the highest exports (FY 2016-17) things have changed dramatically. Two American giants, GM and Ford (30% export market share then), have stopped making cars in India for domestic and export markets. Japanese MNCs gained a stronghold in exports, followed by South Koreans in FY 2023–24. Most exported product has changed from the Ford Ecosport (crossover) then, to the Maruti Baleno (hatchback), now.



What has not changed, though, is the dismal export share of Indian MNCs, namely Mahindra and Tata. Which is constant at ~2%, and volume-wise, has gone down by 651 units in the last seven years!

Exporter MNC’s country of origin



Foreign MNCs with operations across several continents have established India as one of their strong bases. And these MNCs now contribute 98% of the export volume from India. They have invested capital in India and created assets within the country that provide direct and indirect employment to many, besides capital infusion from their suppliers and port operators.



With the exit of Americans (except Jeep), Japanese carmakers took strong control of export volumes. Kia's entry and its strong export volume have taken Korean’s share to 32%. European’s export market share too has dropped in the past due to lower exports by Volkswagen (-42,672 units).

Brand

• Maruti-Suzuki, 55% owned by Suzuki Motors Corporation Japan remains the largest exporter of cars from India, accounting for 42% of the total export volume. It’s an incredible achievement for Maruti to double its export volume in the last 7 years.

• Hyundai’s volume has been consistent for a long time. Kia became the third-largest exporter of cars from India in a very short span of time, thus helping the plant production capacity to reach 95–100% utilization rate in the last fiscal year.

• Volkswagen and Nissan export over 50% of their production to international markets. Followed by Honda, Jeep, and Citroen, with over 30% volume.

• Despite a strong comeback in the Indian domestic market by Tata and Mahindra, their export volume is dismally low, with no progress whatsoever in the last decade. The irony is that within their group, they have software and service exporters like TCS and Tech Mahindra, which add a significant amount to Indian foreign exchange reserves.

Body style



Though in the Indian market, sedans and hatchbacks are dying breeds, there is demand for them in other markets. Thus, both body styles are being made in Indian factories and exported to foreign shores like Mexico, South Africa, etc.

Product: Export sales are higher than domestic sales

• Nissan has discontinued Sunny in India; however, its next generation is still being produced in India and getting exported to Mexico and Brazil.

• Mahindra is still producing diesel and petrol KUV 100, discontinued in India, and exporting them to Sri Lanka and some other markets.

• Hyundai has retained the Verna in the diminishing executive sedan segment of India because it has a substantial market globally, as is the case with the Volkswagen Virtus, Honda City, and Maruti Ciaz, thus making India a hub for global production.

• The 4-door Maruti Jimny, a sales disaster in India, is saved by its export potential.

Well, every market across the world is unique with varying tastes and preferences, which is why if some products have low or no demand in the domestic market, they can still be made for the export market with India as the base.

Product

• Maruti Baleno (Hatchback) was the most exported car from India, followed by Hyundai Verna (Sedan) and Maruti Dzire (sub-4m sedan).

[sachin_cs]

Couple of observations I made-

• So the Nissan manufactures next generation Sunny but doesn’t bother to sell here.
• VW is still manufacturing Polo and Vento?
• VW exports healthy number of Virtus, when I checked the Brazilian Virtus, it comes with a bigger & better driver’s display then why do we get a jugad cheap one
• Domestic manufacturers really need to up the game and test international waters, it will only help them with better QC practices
• Good to see healthy number of sedan exports
• Wondering if the Kia carens exported has same ill engineered bodhyshell or they re engineer it to meet global safety norms.

[Shreyans_Jain]

Mahindra has been taking steps into the South African and Australian markets, which are dominated by Toyota and the likes of Isuzu and Mitsubishi. Both Scorpio N and XUV700 have been launched and from what I have heard, the feedback is pretty good. Although, the ANCAP crash test result of the XUV700 was a setback, primarily because of lack of ADAS, there is plenty of potential and room to grow in future.

[Contrapunto]

Thes graph on "distribution of export by countries" are ALL cases of Japanese and Korean auto majors manufacturing in India for domestic consumption. It is NOT a sign of a competitive automotive industry.

What will be that sign? Its when domestic Indian players like Tata Motors and Mahindra (Ola in future?) start exporting to other markets in large numbers to grow the other slices of the pie. I would say we are a good 5 years away from that. However, the EV transition is throwing up new opportunities for newer players. But that window will not last forever. If TML/ M&M are not agile enough, the lower cost, and diverse set of Chinese auto makers will close that opportunity.

[clementw]

Interesting that the next generation Sunny is being made and exported but is not offered here. And the KUV has buyers abroad is a surprise. Is it possible that these export models are superior to what we get here?

[sen2693]

What is the hurdle in selling a car that you are anyways manufacturing in this country (Sunny)?

Since you already have the dealer and service network, supply chain, logistics, even if you sell only 5 cars a month for a ridiculuos price (because of tax), what is the harm in doing so? Will that be a loss for the company?

[Ghosty]

Originally Posted by sen2693

What is the hurdle in selling a car that you are anyways manufacturing in this country (Sunny)?

Since you already have the dealer and service network, supply chain, logistics, even if you sell only 5 cars a month for a ridiculous price (because of tax), what is the harm in doing so? Will that be a loss for the company?

Yes it would be a very huge loss if it's a dude in sales due to cost of transportation, advertisements, TD vehicles, training of sales rep and workshop mechanics, converting it to Right Hand Drive, goverment clearances and tests, manufacturing of new parts due to RHD conversion, shipping of parts (high volume) to ASS and workshops, etc

[anjan_c2007]

The export figures for homegrown brands need to grow. Their respective shares in the combined export figures is quite glaring. Most of these are exported to the neighbouring countries like Nepal, Bangladesh and Sri Lanka (earlier Maldives) due to their price advantage and spares affordability and availability.







Above pictures of Indian brands in Nepal

It is frustrating to note that we have established our first ever car assembling plant in 1942 (Hindustan Motors, Okha, Gujarat), but 82 years down the line we are yet to have a home designed car, that is exported to the developed Western markets in huge numbers.

[venukrithish]

I love how the current Sunny looks. I hated the rear design of the one that was sold here. I understand why Nissan doesn't bother selling it here as sedan sales are almost insignificant right now. But selling it here would certainly make its portfolio larger and would make the brand more premium.

[AutoDowntowner]

Originally Posted by venukrithish

I love how the current Sunny looks. I hated the rear design of the one that was sold here. I understand why Nissan doesn't bother selling it here as sedan sales are almost insignificant right now. But selling it here would certainly make its portfolio larger and would make the brand more premium.

If I am not wrong, this is Nissan Altima in US market.

[ashivas89]

Originally Posted by Shreyans_Jain

Although, the ANCAP crash test result of the XUV700 was a setback, primarily because of lack of ADAS, there is plenty of potential and room to grow in future.

OT post, but you probably mean Scorpio N. The XUV700 has not been rated by ANCAP yet.

[venukrithish]

Originally Posted by AutoDowntowner

If I am not wrong, this is Nissan Altima in US market.

I think it's the Versa in the US. Altima is based on D platform but this is based on V platform, same as the K14 Micra. Nissan could easily launch this and the Micra here that too at competitive prices but the market is not favourable towards hatches or sedans. Kicks is the SUV based on this platform but even that didn't sell well here.

[r2212xx]

If you consider that several of the Toyota-badged Marutis sold in South Africa, Nigeria, and some other nations are also manufactured in India at Maruti's plant, in a way, Maruti's true export share is even greater, even if by a slight amount. Of course, for all business terms, one cannot consider it that way since Maruti likely bills them for a wholesale price to Toyota, and then they export them. Nevertheless, it is interesting to note, considering that there are some Toyota-badged Marutis not sold in India, such as the Toyota Vitz (rebadged Maruti Celerio) and Toyota Belta (rebadged Maruti Ciaz).

[DRPSREDDY]

Indian domestic manufacturers should push the global sales of their products. TATA was ahead in the game with Gen 1 Safari, Indica, Indigo & Marina and Xenon exported to many RHD markets like South Africa, South America, Africa, Spain, Portugal apart from some RHD markets of Asean. Also TATA started with production of LHD Safari, Indica and Indigo.

Later the sales started to fall as products started to get obsolete and TATA was in no mood to upgrade platforms and products due to mounting losses and loss of vision. Due to recession and financial reasons TATA backed out and did not even look back to get back there. Also worldwide uncertainty in automobile powertrain has put their plans in a freezer. Now TATA plans the international plunge with the EVs and not with ICE.

Mahindra too started late only with new products starting with XUV500 around 2016-17 and followed it up with XUV700 and Scorpio. Now they too export to limited countries like Australia, New Zealand and South Africa.

Both both companies are now in a huge upward surge that they are unable to serve the local market with huge waiting periods. The don't have much capacity for export. But that doesn't mean they should be happy there. Both these companies should understand that only about 80-odd countries drive RHD and 180+ countries drive LHD. To increase world-wide presence, they should make LHD cars. For that they need cap-ex for new plants that make double the number of cars and keep expanding products and production. Now both the companies are rolling with profits and they should make the bold move. Also calls for huge investment in R&D that they are al it as both companies filed a record number of patents and most of them granted.

Hope they make huge strides in exports.

[neerajku]

This is a very interesting topic. Older members like I will remember that it was only a few decades back that export oriented stuff used to have higher standards of quality and every possible spec. Few specs may still be different but overall quality what we get here is similar to "export models."
The only jarrin note in this thread is the misinformed discussion about swadeshi versus videshi debate. The mindset of videshi is evil; will take another generation to be wiped clean.
How is Maruti or Hyundai or Kia a videshi car? Made by Indian talent, in some cases designed by Indian talent, parts supplied by world class Indian suppliers, workers, managers, shareholders, taxes and most of all prestige when we see a Suzuki made here plying across the globe. It is also a tribute to our manufacturing and now engineering prowess.
Personally I am very happy that a made in India car is being exported and more than half a million. Whether the owner is an Indian or a foreigner is not of any importance to me. If Indian owned cars also do well, that is another feather in our cap but not the only one.