The Hindu Business Line : Weakening Re brightens export prospects of auto makers

Mumbai, Sept. 20 A weakening rupee has set Indian automobile companies revising their export targets, reviewing future outlooks and exploring new markets to push overseas sales.

The rupee depreciated against the dollar from Rs 40 in the beginning of the fiscal to Rs 46 currently.

Hyundai Motors India, the country’s largest passenger car exporter, is planning to revise its export target in view of the favourable currency rate and also look at new, smaller markets.

“Earlier we set an export target of 2.12 lakh units for the current fiscal. We have revised it to 2.6 lakh units,” Mr Arvind Saxena, Senior Vice-President (Marketing and Sales), Hyundai Motor India, told Business Line.

Hyundai has exported close to 97,000 cars so far this year, a 66 per cent year-on-year growth. “We are exporting to 96 countries. We are present in all the major markets. Still there are many smaller markets where we want to enter,” he said.

The rupee depreciation happened very recently and the company is still working out its impact. It will help better export revenues, Mr Saxena said.

“The present situation is good for exports. We will explore new regions with our tractors and utility vehicles,” said Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra & Mahindra. “We will increase our tractor sales in Africa and utility vehicle sales in Latin America. We have set up assembly plants in these regions,” said Mr Mahindra. The company’s export of utility and three-wheeler vehicles showed a 33 per cent increase at 5,182 units up to August this year, compared with the same year-ago period.

Rise in margins

Indian automobile manufacturers have been struggling under adversities in the domestic market, ranging from escalating input costs to high interest rates. Automobile exports, which have been on the upswing for sometime now, are likely to get a further push due to the depreciation of the rupee.

“Depreciation has been so sudden and we don’t know if it will remain the same for another six months. But it is certain that our export margins will substantially increase,” said Mr H.S. Goindi, Head of Sales, Service and Marketing, TVS Motors. Exports constitute 10 per cent of the total revenues of the company. TVS, the second largest two-wheeler exporter from India, sold 73,392 vehicles in markets abroad in the current fiscal, posting a 49-per cent growth.

According to the latest report from Society of Indian Automobile Manufacturers, total vehicle exports from India till August, across all segments, is up 24 per cent year-on-year at 1,40,728 units.

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