Automakers suffer export jolt as well
Recession in most developed markets have led to a sharp decline in export performance in the last three months for Mahindra and Mahindra, Bajaj Auto and even Hyundai Motor India, Sumant Banerji reports.autos Updated: Apr 07, 2009 23:07 IST
Just when it looked like the automobile industry was beginning to see some signs of a revival in the domestic market, its exports have started to pose a problem. Recession in most developed markets have led to a sharp decline in export performance in the last three months for Mahindra and Mahindra, Bajaj Auto and even Hyundai Motor India.
Hyundai, the largest exporter of cars in the country, has seen lower-than-expected growth in the second half of fiscal 2008-09. The country’s largest utility vehicle maker M&M has seen a 31 per cent drop in export sales in 2008-09 at 8,500 units against 12,359 units in 2007-08. But the fall has been steeper in the last three months.
Between January and March 2009, exports have dipped by 75.38 per cent at just 1,052 units against 4,274 units in the same period last year. This at a time when — thanks to the launch of the new Xylo in mid January — Mahindra’s domestic sales have been at an all-time high.
“The decline in exports show that developed markets are taking a much longer time overcoming the recession that our domestic market,” said Pawan Goenka, president, automotive sector, M&M. “It is difficult to say when the markets would turn and I guess all the big players would want to know the answer, but in the short term the situation remains grim.”
Two-wheeler major Bajaj Auto has a similar story. Though its exports for the full year have grown by 25 per cent, in the last two months there has been a reversal. Bajaj’s exports in the February declined by 20 per cent and in March it went down by another 8 per cent.
“Exports have taken a hit in the fourth quarter and from an average of about 65,000 units per month, it has come down to 40-45,000 units. We, however, are hopeful of the situation improving June onwards,” said a senior Bajaj Auto official.
Even those firms that have led the industry in exports, such as Hyundai and Maruti, the numbers have been lower than expectations.
“Between January and March, our exports have grown by 20 per cent over last year but it could have been better and we had expected even faster growth,” said Arvind Saxena, senior vice-president, Hyundai Motor India.
Similarly, Japanese carmaker Nissan which has an agreement with Maruti Suzuki for sourcing its latest hatchback A Star, has still not placed the order yet. Nissan was expected to place the order and start exports of the car for developed markets by the beginning of this year.
Maruti has however, export of the car to Europe and 19,000 units have been shipped till date.