Indian Auto Exports Hit Speed Bump Despite Domestic Market Growth: SIAM

India's automobile industry witnessed a mixed bag in FY24, with domestic sales thriving but exports facing a 5.5 per cent decline, according to SIAM. While passenger vehicles saw a marginal increase, key segments like two-wheelers, commercial vehicles, and three-wheelers took a hit due to global economic headwinds.

Passenger vehicles, a bright spot, managed a marginal 1.4 per cent export growth. Leading car makers like Maruti Suzuki and Hyundai continued to perform well in overseas markets. However, the two-wheeler segment, a major contributor to Indian auto exports, faced a steeper decline of 5.3 per cent. This slump reflects the broader global economic slowdown impacting consumer spending on non-essential purchases.

The commercial vehicle and three-wheeler sectors were hit even harder, with exports plummeting by 16 per cent and 18 per cent respectively.  SIAM President Vinod Aggarwal blamed monetary crises in key export markets, particularly those in Africa and Latin America, where India traditionally enjoys a strong presence. These countries are battling with foreign exchange issues, making Indian vehicles more expensive for their citizens.

Adding fuel to the fire are global geopolitical tensions, such as the ongoing conflict in Ukraine, which disrupt supply chains and increase shipping costs. The recent Red Sea crisis, though currently resolved, also caused temporary disruptions and raised shipping times. The first quarter of FY25 witnessed a promising recovery, particularly in two-wheeler exports. This uptick suggests a potential turnaround for the industry in the coming months.

Carmakers witnessed a mix of fortunes. Maruti Suzuki, the undisputed leader, maintained its dominance with a nearly 10 per cent increase, showcasing its strong domestic presence. Hyundai followed suit with respectable growth. However, Kia Motors faced a significant decline, possibly due to strategic shifts or product positioning challenges. European carmakers presented contrasting results, with Volkswagen witnessing a surge likely due to a niche market for specific features, while Nissan experienced a decline, highlighting the need for adaptation.

The motorcycle market saw a slight decline overall. Bajaj Auto, a leading player, faced a drop, possibly due to increased competition or changing consumer preferences. TVS Motor displayed a marginal decline, indicating relative stability. Honda Motorcycles & Scooter India (HMSI) achieved impressive growth, suggesting their strategies resonated with consumers. Established players like Yamaha and Suzuki faced declines, underlining the fiercely competitive landscape.