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US becomes third-largest market for India’s cars

Varun Aggarwal Mumbai | Updated on July 17, 2018 Published on July 17, 2018

The US, which was non-existent as an export market for Indian automakers, is now the third-largest export destination , thanks to the slowdown in other regions.

In FY 2018, passenger car exports to the US ballooned to $654 million from a paltry $3.52 million a year before, export data from the Ministry of Commerce showed.

With this, the US market contributed to 9.2 per cent of the overall car exports from India, the third largest.

The impact of Brexit and firming commodity prices have hit India’s exports to most of the popular markets such as the UK and Europe, according to industry experts.

Exports to the UK, which was the second-largest market after Mexico in FY17, fell by almost half to $220 million in FY18. Meanwhile, exports to Spain went down 30 per cent to $137 million and to Italy by 25 per cent to $263 million.

Export to Mexico, the largest market for Indian automakers, grew 7.7 per cent to $1.69 billion in FY2018.

The surge in US exports, however, helped in an overall growth of exports for the year.

Most exported cars

The overall car exports in FY 2018 grew 10 per cent to $7.1 billion compared with $6.5 billion in the previous year.

In 2017, two American companies, Ford and GM started exporting to the US in a big way.

While Ford started exporting its EcoSport from India to the US, GM completely shut down India sales, using the entire production capacity for exports, primarily to the US.

Ford EcoSport and Chevrolet Beat remained the most exported cars from India. The US continues to be the largest car market in the world and Indian exports are only scratching the surface.

Being a higher margin market, companies such as Maruti Suzuki, Hyundai and even Volkswagen are ramping up their exports to the US from India, which has become a large automotive manufacturing hub, selling to about 175 countries.

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Published on July 17, 2018
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