Global auto companies start exporting sedans & SUVs from India ...

Source: The Economic Times, Jun 25, 2012

MUMBAI: Japanese carmakers Nissan and Toyota have started exporting midsized cars made in India, spearheading a strategic change that seeks to make the most of the country?s cost advantage and growing technical prowess.

In the next 12-18 months, Nissan plans to export 50,000 units of India-made sedan Sunny to the West, executives familiar with the matter said, adding that rival Toyota will ship Etios cars, made at its Indian unit, to South Africa.

Volkswagen, Ford and Renault are expected to join them soon. Experts say exports not only help in dealing with the slowdown in the domestic market, but also act as a hedge against costlier imports, which have turned dearer by 25-30% in recent months.

French carmaker Renault plans to export to the UK about 25,000 units of its sports utility vehicle Duster over 12-18 months. The shipments may start in October.

Similarly, Germany?s Volkswagen is keen on producing left-hand drive Vento sedans in India for markets in the West. Volkswagen, which exports India-made Vento cars to South Africa and Malaysia, has mandated vendors to develop components for a left-hand drive version of the sedan.
The carmaker plans to export 8,000-10,000 such units by 2013, said an executive, who did not wish to be named.

?Our export of the Vento to South Africa confirms that we are able to produce high-quality cars in India at competitive costs,? Volkswagen India?s spokesperson said, adding, ?This also shows our potential to further extend our exports to other markets. We are looking at various opportunities in the future, also in left-hand drive markets.?

The Volkswagen spokesperson, however, declined comment on target markets and numbers.

Ford Motor, too, is likely to export its yet-to-be launched EcoSport SUV from India, according to people familiar with the company?s plans.

Executives dealing with the projects of multinational carmakers say that over 100,000 sedans and SUVs manufactured in India are slated for export over the next 12 months. The depreciating rupee, which ended at a record low on Friday, is only likely to accelerate such plans.

Experts say the growth in exports, which comes at a time the global economy is slowing down, could accelerate once the economy picks up. There are not many right-hand drive manufacturing bases that are as cost competitive as India, said Kumar Kandaswami, director at Deloitte.

?The cost of engineering, both at the carmaker?s end and supplier?s level is very competitive, which gives India an edge. Manufacturers use exports as not only an opportunity to mitigate risk arising out of volatile currency, but even to balance the demand in the domestic market,? said Kandaswami.

Toyota Kirloskar, the Indian subsidiary of the Japanese carmaker, has already received orders to export 20,000 units of the Etios sedan to South Africa. The company?s deputy MD, marketing, Sandeep Singh, told ET the exports will help cut losses on account of the falling rupee.

Ford, too, is firming up plans to export its EcoSport SUV from India to South Africa next year.

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