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Indian Small Car Exports to Europe in Trouble

By Motortrend India Staff   |   06 October,2009

The small car exports by Indian small-car manufacturers namely Maruti Suzuki and Hyundai Motor have started to decrease as a result of the lapse of scrappage schemes in various European markets by year-end. The Indian car producers witnessed a 35 to 40 per cent rise in exports the last few months as a result of the incentives offered by the United Kingdom, Germany, and France.

Germany and Austria have already accomplished their scrappage programmes. The rest of the countries might also wrap up their schemes by December.

"While we are hoping that the European countries will announce new schemes to encourage small car exports or the existing schemes in some countries will get a further extension, we are simultaneously working with non-European countries," said a senior official at a Delhi-based car company.

Maruti Suzuki had exported over 58,500 units till September 30 this year, with A-Star accounting for 33,500 units, Nissan Pixo exported over 25,000 units and other models about 7,900 units.

"We are focusing on non-European markets for exports, but once the scrappage incentives are exhausted in Europe, the export numbers are likely to normalise," said a Maruti-Suzuki spokesperson. But there are possibilities that Maruti Suzuki will still export more than 1.16 lakh units this year because many European countries have cancelled their scrappage schemes.

Hyundai Motor India (HMIL) is India's largest car exporter, and it has also got the advantage from additional European export orders. More than 50 per cent Hyundai's exports are targeted at European countries. Hyundai aims to export about 2.7 lakh units in 2009-10 where it was 2.45 lakh units last year.

"We are covered for the calendar year as we get advance export orders. The export orders have lowered and we will start seeing the impact," said Arvind Saxena, HMIL's senior vice-president for sales and marketing.

The UK government had primarily formed a 300-million pounds corpus under cash-for-clunkers scheme and offered the customer 2,000 pounds for purchasing a new car, now an additional 100-million pounds funding has been added. Spain, Italy, Austria and the Netherlands are the other European countries that have scrappage programme.

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