Segment Y Automotive Header  
Global car groups to rev up India exports
Financial Times, 09 Feb '14
Segment Y in the press
» India's manufacturing sector benefits from China's challenges
» Uber's tricky vision aims to tempt Indians from car ownership
» Mahindra to buy controlling stake in Peugeot scooter unit
» Luxury carmakers hindered by Indian potholes
» Global car groups to rev up India exports
» Nissan considers introduction of electric cars in Thailand
» Japan disaster affects Indian car production
» Indian auto boom gets bubbly
» India doesn't need green cars: Environment minister
» Superbike sales rise as Harley Davidson enters India
» Micra marks Ghosn's bid to make up for lost time
» Foreign luxury cars: Picking up speed in India
» Maruti Suzuki plans to drive into MUV segment
» In India, 'green cars' look like a hard sell
» Ford makes push to boost Asian presence
» Harley-Davidson plots India sales drive
» Harley-Davidson set to finally ride into India
» Superbike sales speed up in slowing economy
» 25 years later, second small car revolution
» India's car makers see glut
» PSA again exploring India opportunities
» Tough Times for the Tata Nano
» Can small really be beautiful?
» India cranks out small cars for export
» Will Tata's great car gamble backfire?
» Can Tata rev up Jaguar?
» Tata unveils world's cheapest car
» Automakers come knocking
» Coming soon, the $5000 car
» India's automotive plastics use to rise
» China readying new taxes on gas guzzlers
» New cars for under $5000
» At the Beijing Auto Show, signs of a behemoth to come
» Chinese automaker plans assembly line in Malaysia
» Chinese firm plans car plant in Malaysia

Global car companies including Volkswagen, Ford and Renault-Nissan are redoubling plans to transform India into an auto export hub and targeting vehicle shipments to Europe and the US as a hedge against shrinking demand in Asia's third-largest economy.

Hopes that India's once fast-growing market will soon rival China have been savaged over the past two years by a slump in car sales and rising costs following a sharp depreciation in India's rupee.

Many international motor groups, which have channelled more than US$ 8 billion into India since the mid-1990s, now view exports as the only answer to chronic oversupply in a country where vehicle capacity will more than double to 9.5 million by 2018, up from 4.5 million last year, according to a provider of automotive forecasts.

Volkswagen, the world's second-largest car company by sales, plans to nearly treble Indian exports to almost 55,000 units this year, having failed to achieve a breakthrough in the nation's ultra price-sensitive domestic market.

Mahesh Kodumudi, president of Volkswagen India, which already exports cars to about 30 countries and has found particular success shipping vehicles to Mexico, says that his company will consider exporting to Europe and America.

"We see tremendous potential for India to become an export hub, especially with the rupee weakening," he said at the 2014 New Delhi auto expo. "If I can export to Mexico, why can't I export to the United States?" he added. "Even could be eastern Europe, western Europe as well."

US-based Ford is also increasingly focused on exports as it opens a US$ 1 billion factory this year, bringing the company's annual capacity to 440,000 vehicles despite selling only 77,000 in India during the last financial year.

Ford plans to export to more than 50 markets from its two Indian facilities including 10 countries for its successful EcoSport sport utility vehicle which it already plans to send to countries in western Europe.

Ford said it had "no specific plans" to export the EcoSport to the US but industry analysts said that the group was likely to consider the move.

"For Ford, it makes a great deal of sense to look to export to America," says the director of a New Delhi-based research group.

"Given how popular that car has been all around the world and how much spare capacity they are going to have in India...I think they will do it," he added.

Renault and Nissan, which operate in a global alliance, also hope to increase exports, having sent abroad more than 60% of the roughly 600,000 vehicles the duo has so far produced in India.

Indian auto-makers are projected to send abroad about 553,000 passenger and light-commercial vehicles by 2020, up from about 375,000 in 2011, according to an automotive consultancy service.

India's underused factories and geographic location see the country well-placed to supply emerging markets in Africa, Asia and the Middle East, analysts say but exports to Europe and even the US are also increasingly attractive.

"After the recession in the West, there is an increased focus on value... so it is perfectly possible that mid-range cars made in India, like the EcoSport, could find a good market in America or Europe," says Paul Blokland of Segment Y Automotive Intelligence, an India-based research group.