India: Indian auto exports set to hit record high
The growth in overseas shipments came as a reprieve for two-wheeler manufacturers who have struggled to increase volumes in the local market for the past three years.
Exports of two-wheelers – which account for nearly 80% of vehicle shipments from India – rose 40% to 4,091,777 units in the first 11 months of the fiscal year beginning in April, according to the data available from industry body Society of Indian Automobile Manufacturers (SIAM) . Total automobile exports during the period amounted to 5,073,323 units. Exports of passenger vehicles and commercial vehicles have yet to recover to levels seen five years ago – their shipments peaked in FY17 at 758,727 units and 108,271 units, respectively.
The country previously saw a peak in vehicle exports of 4.75 million units in fiscal 2020. Two-wheeler exports at the time totaled 3.5 million units.
Nigeria, Nepal, Colombia, Bangladesh, Kenya, Mexico, Philippines, Guatemala, Austria and Uganda are the top 10 export markets for Indian-made two-wheelers, according to data available from the Ministry of Commerce and Industry.
Bajaj Auto – which accounts for one in two two-wheelers exported from India – saw its export volumes rise by a quarter to 2,046,529 units in the first 11 months of the financial year. “On the export front, the outlook remains strong, we are likely to end FY22 with record numbers,” chief executive Rakesh Sharma said in a recent interaction.
Chennai-based TVS Motor Co recorded a 51% increase in two-wheeler shipments to 994,177 units between April 2021 and February this year. “Over the past year, the international trade of the two-wheeler industry has grown and there is a steady demand for quality, durable and more fuel-efficient personal mobility options,” said said a spokesperson, adding that the wheeler business’ international two-wheeler hit the sales milestone of 1 million units for the first time in fiscal 22.
The surge in exports has been a boon for two-wheeler manufacturers and at a time when demand for motorcycles and scooters, especially entry-level ones, in the local market has come under pressure due to a increased acquisition costs after the transition to BS-VI emission standards and the economic impact of the pandemic in rural areas. Two-wheeler sales in India fell 9.8% to 12,282,202 units in the first 11 months of FY22, after falling 13% and 18% in the previous two years, after peaked at 21,179,847 units sold in FY19.
TVS said it will continue to build on positive export momentum, expanding into new geographies with attractive products and technology-laden offerings. The company said it is seeing a move towards premiumization in all key markets and expects, among other things, products such as TVS Apache, TVS NTORQ 125, TVS HLX, TVS Raider and TVS Neo to wear well.
The country’s largest two-wheeler manufacturer, Hero MotoCorp, aims to register 15% of its total global business volumes by 2025. A spokesperson, adding: “The company places a strong emphasis on the expanding its presence in global markets.”
Colombia, Peru, Argentina and Mexico in Latin America; Kenya, Uganda and Tanzania in East Africa; Nigeria in West Africa, as well as Bangladesh and Nepal in Asia are among Hero MotoCorp’s main markets. The company is gearing up to meet demand with geography-specific products such as the Xpulse 200, Xtreme 160R, Hunter and the Hunk line of motorcycles.
Honda Motorcycle & Scooter India (HMSI) said it received “so much demand” after the move to BS-VI standards which were already in place in most advanced markets like Europe, Australia and Japan.
Kits of the H’ness motorcycle are already being exported to Japan, and efforts are underway to increase shipments to ASEAN and advanced countries, Latin America and North America, the chairman told ET. from HMSI, Atsushi Ogata. “Not just the H’ness, but the CB series and the scooter segment,” he said.
The company’s exports increased 66% to 319,058 units in FY22 through February. It aims to increase it significantly in the years to come.