from Raghavendra Verma, in New Delhi
A new study by the Federation of Indian Chambers of Commerce and Industry (FICCI) has highlighted the fact that, while India has become the seventh largest producer of vehicles in the world, it still holds only 1% of the global export market. Last year’s exports worth US$4.5bn, including passenger vehicles, commercial vehicles and motorcycles, saw the country ranked 22nd.
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However, Sugato Sen, senior director of the Society of Indian Automobile Manufacturers (SIAM), told just-auto there was a strategy behind this apparent under-performance. He said the Indian industry has deliberately chosen to operate in the niche segment of small cars, which will pay dividends in the future.
“Due to environmental reasons and [the] international fuel regime the small cars will become more popular and our manufacturers will be benefited more than anybody else”, he said.
The FICCI report said the UK is the largest destination for India’s automobile exports and, in the last four years, sales have grown eight times from $52m to $481m, 98% of those being passenger vehicles. The UK market is followed in importance by Italy, Germany, the Netherlands and South Africa.
Meanwhile, the mood in the Indian automobile industry remains upbeat. “Today we are exporting almost half a million cars which was absolutely unimaginable even five years ago”, said Sen. Indeed, the report said the industry is confident of achieving its export target of $12bn for 2013-14 and called upon the central government to aim for a global share of at least 3% by 2016.
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By GlobalDataAccording to a government ‘automotive mission plan’, by 2016 the output of the industry would reach $145bn which would be more that 10% of India’s GDP and provide additional employment for 25m people.
“We are very positive that exports will continue to grow significantly as the existing exporters have ambitious plans and undertaking capacity expansion to meet the export requirements”, said Sen.
