The auto industry ended fiscal 2010-11 on a high, with export volumes growing by 30 per cent, outpacing the domestic growth of 26 per cent. According to data released by the Society of Indian Automobile Manufacturers (SIAM): Growth this year in exports has come mainly from commercial vehicles (CV) segment. Export volumes of medium and heavy vehicles, light vehicles and three-wheelers have shown a year-on-year growth of 43 per cent, 91 per cent and 56 per cent respectively.

This in contrast with the last two years when exports from the passenger car segment witnessed the maximum growth. Though the export growth has been robust, the share of exports in the total industry sales (domestic and exports) has remained somewhat stagnant in the last three years. From about 13.6 per cent in 2008-09, share of exports stand at 13.1 per cent in 2010-11.

Robust performance

Supporting the robust performance in the CV segment are Tata Motors and Ashok Leyland, both of which have registered a year-on-year volume growth of over 70 per cent in the April 2010- March 2011 period. While the share of Ashok Leyland and Mahindra and Mahindra (predominantly LCVs) in the total CV exports have remained between 13 per cent and 15 per cent in the last two years, Tata Motors has seen its share improve from 61 to 65 per cent.

Bajaj Auto remains the largest player in the two- and three-wheeler exports with 63 per cent and 85 per cent share respectively. This puts the recent concerns about the impact of the possible withdrawal of the DEPB (export incentive) scheme in perspective. TVS Motors has a 10.5 per cent share in two-wheelers, while Hero Honda comes third with a 8.6 per cent market share. But with the Hero Group getting a free hand in exports, following the parting of ways with Honda, the company may move up the ladder soon. In terms of Y-o-Y growth, these three companies have grown between 33 per cent and 38 per cent in the two-wheeler segment.

Declining share in exports

Strikingly, while the above two-wheeler companies' share has remained constant in the last two years, the share of Hyundai and Maruti Suzuki has shown a decline. Hyundai Motors, which has made India its small car hub, has witnessed its share in the total passenger car exports decline from 64 per cent in 2009-10 to 51.4 per cent currently. Maruti's share stands at 30.4 per cent in 2010-11 vis-à-vis 33 per cent last year. Year-on-year volume growth for these two companies too has dropped by 18 per cent and 6 per cent respectively in 2010-11.

One reason for this fall could be the absence of scrappage incentives in Europe during 2010-11. It will be remembered that during the slowdown in 2009, European nations, in a bid to boost demand for new vehicles, incentivised scrapping of old cars. This also explains why passenger car export volumes as a whole grew only by 1.6 per cent in 2010-11 after growing by 54 and 33 per cent respectively in the last two years. Automakers and component manufacturers expect Europe growth to be strong this year.

However, companies such as Maruti Suzuki have de-risked by diversifying their export base. From about 77 per cent of total exports in 2009-10, the share of exports to Europe from Maruti has come down to 43 per cent currently.

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