There is not much impact on the shipments of automobile products to overseas markets due to the Iran-Israel conflict, as companies have already been taking other routes since the Red Sea crisis, industry experts told businessline.

“The impact was there (during the Red Sea crisis), but it has been worked around... now we are taking the longer routes. The lead time has gone up – earlier it used to be around eight weeks, but now it is around 10 weeks. The costs too have gone up – transportation/ freight rates are up because of the longer route. Other than that, there is no concern because it’s not that we are not able to sell,” Vinod Aggarwal, President, the Society of Indian Automobile Manufacturers (SIAM) told businessline.

He said exports are improving and two/three-wheelers have been performing better in the last quarter.

Surge in export

According to the latest data shared by SIAM, the overall export of vehicles across categories has gone up by 22.5 per cent y-o-y to 11,68,015 units in January-March quarter as compared with 9,53,332 units in the same period in FY22-23.

Aggarwal, who is the MD and CEO,Volvo Eicher Commercial Vehicles (VECV), said exports are getting better which is visible in the last quarter’s performance because there has been a better situation vis-a-vis foreign exchange.

“Global situation is still not very conducive but we are still seeing better traction in exports...we have seen two/three-wheeler perform better in the last quarter,” he added.

Said Rakesh Sharma, Executive Director, Baja Auto: “The wheel is moving. There is no big concern about the Iran conflict”.

“I would say this whole Red Sea conflict and the potential of escalation is making the whole management of the Westwards logistics a complex situation. In fact, we watch it every hour of the day. But, the wheel is moving... it’s got delayed and a bit expensive, but the wheel is moving. It’s not that some markets have suddenly starved of the products (vehicles),” he said.

Sharma said that a lot of shipments are happening across the Cape of Good Hope and it is adding 4,000-5,000 nautical miles or an extra 15 days from the regular time-frame to go to Latin America, where Bajaj Auto has the maximum exports.

“Secondly, mostly the freight rates have doubled so they are impacting the delivered cost of the product. But, yes in a motorcycle what happens is over 170 units get loaded into a container, unlike cars and therefore, per unit cost impact is there but it is not that big,” he added.

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