The Indian automotive industry has encountered a significant contraction in its export markets, with figures illustrating a 5.5% decline in the fiscal year 2024 (FY24). The Society of Indian Automobile Manufacturers (SIAM), the apex body representing the sector, has recently released data that paints a rather grim picture for overseas shipments. In stark contrast to the robust 47,61,299 units dispatched in the preceding fiscal year (FY23), the last fiscal saw a downturn, with exports tallying at just 45,00,492 units.
SIAM President Vinod Aggarwal has voiced concerns over the volatility clouding various global markets that traditionally import Indian vehicles. “Some of the countries, where we are very strong with commercial vehicle and two-wheeler exports, have been facing foreign exchange-related issues,” he remarked, underlying factors contributing to the disruption in trade flows.
As per the data analysis, the past fiscal year wasn’t uniformly harsh across all vehicle segments. While the commercial vehicle, two-wheeler, and three-wheeler categories bore the brunt with noticeable declines, the passenger vehicle segment managed a nominal ascent. In FY24, passenger vehicle exports crept up by 1.4%, with 6,72,105 units reaching overseas markets versus the 6,62,703 units in FY23.
Market leader Maruti Suzuki maintained its supremacy, with a marked increase in its export volume to 2,80,712 units, rising from the 2,55,439 units in the previous year. Following suit, Hyundai Motor India exported a total of 1,63,155 units. The last fiscal also saw contributions from Kia Motors and Volkswagen India, shipping out 52,105 and 44,180 units respectively. Nissan Motor India and Honda Cars rounded out the significant contributors, with shipments tallying at 42,989 and 37,589 units correspondingly over the fiscal period.
Nonetheless, the two-wheeler sector struggled, suffering a 5.3% drop in exports as the numbers fell to 34,58,416 units from 36,52,122 units. The commercial vehicle sector faced an even steeper decline, witnessing a 16% reduction to 65,816 units compared to the previous 78,645 units in FY23. Similarly, the three-wheeler export markets contracted by 18%, closing the fiscal at 2,99,977 units, a departure from the 3,65,549 units in FY23.
Amidst these declines, the first signs of recovery surfaced in the January-March quarter of the year. Specifically, the two-wheeler segment showed promise of bouncing back, hinting at the potential for a more prosperous performance in the remainder of the year. Reflecting on this positive development, Aggarwal stated, “We are very hopeful that going forward, the situation will improve,” indicating a cautiously optimistic outlook for the industry’s export prospects.
Maruti Suzuki’s leadership in the passenger vehicle export market can be attributed to its expansive and varied product lineup, which has consistently appealed to overseas buyers. Hyundai, with its commitment to quality and innovation, has similarly retained a strong export presence, while emerging players like Kia and established conglomerates like Volkswagen continue to make headway into international markets.
As the industry negotiates these challenging times, the narrative is not solely about the numbers that are going south. It’s about the resilience and the strategic maneuvers being undertaken to pivot and adapt to an unpredictable economic climate. Companies are pressing on with more vigor in R&D, product diversification, and exploring alternative markets to hedge against such downturns.
The Indian auto sector, recognized for its value proposition and engineering capabilities, is positioned to navigate through this period with a balance of strategic patience and aggressive market engagement strategies. The latest figures, while sobering, are not seen as a definitive trend but a temporary setback owing to global financial undercurrents. With a focus on the silver lining presented by the nascent recovery observed in the two-wheeler segment, industry leaders remain sanguine about the future of Indian automobile exports.
