India – Export Haven for Global Automakers

Compact hatchbacks – cheap, fuel efficient, versatile – this is how mean machines fanatics describe them. So far, hatchbacks are on the top of the popularity charts in India’s fast growing auto industry. And as international auto makers scuffle to establish their production plants to manufacture small cars in India, both established and new entrants consider it as a big avenue for the country – the future small car export center of Asia.Hyundai Motor from South Korea has shifted its entire manufacturing of Atos Prime (company’s most popular compact) to Sriperumbudur, a town in south India just (the company has same plans for its premium hatchback Getz). One-third of cars made at this facility are exported to over 65 countries, from Sri Lanka to Mexico. 

By October this year, Hyundai will be ready with a second production facility, thus doubling its annual production to six lakh cars, majority of them being compact hatchbacks that cost a little over $7000. The Chief Executive of Hyundai India’s operations, Heung Soo Lheem, said, “We have a very clear target, India will be our export hub, which means all our small cars will be produced here,” reported 7days on July 16, 2007.Suzuki Motor Corp, that owns a majority stake in the largest carmaker of India, Maruti Udyog, is also injecting investment of $2 Billion in India and has plans to export two lakh cars from it by 2010, reported Osamu Suzuki, Chairman, in a statement published by 7days.


According to RNCOS report Asian Automotive Industry Outlook (2007-2011), auto exports have emerged as the biggest growth sector in the Indian auto industry. Although the country started from a low base, exports of passenger vehicles surged to over 175000 units in 2005-06, up by around 5.5% from 2004-05 and over 230.2% from 2001-02. The healthy economic growth of the country will consolidate its auto industry in future, thereby supporting its bid to become an export hub.Honda Motor has also started to build a new facility for premium class hatchbacks in western India while expectations are rife that Volkswagen AG and Toyota Motor will soon come up with similar ventures.

The RNCOS report discusses the Asian auto industry and its position in the global market. It evaluates the market parameter defining the auto industry at country-level, impact of discounts and finance schemes on auto sales, government initiatives, opportunity and challenges, and future environment.


One Response

  1. Excellent post thank you for the info

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