India speeds past China in auto exports

Discussion in 'Economy & Infrastructure' started by NSG_Blackcats, Sep 8, 2009.

  1. NSG_Blackcats

    NSG_Blackcats Member of The Month OCTOBER 2009 Senior Member

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    NEW DELHI: China may be the world's shop floor, but India is rolling it out faster when it comes to automobile exports. India exported a total of 2.30 lakh cars, vans, SUVs and trucks between January and July 2009, a growth of 18% even as China’s exports tumbled 60% in the same period to 1.65 lakh units. The Indian domestic market may be just 19% of China’s — which has overtaken the US to become the world’s largest — but the ‘Made In India’ tag, especially on small cars, has clearly acquired a global cachet, helping auto exports grow even as other countries suffered a slump.

    Industry experts pointed out that India scores due to its liberal investment policies and high quality manufacturing which stems from its growing prowess in research and development. India’s biggest advantage is its edge in small cars and the way companies — including global giants — are using the market for selling, as well as developing, new compact models. India itself presents a big opportunity in small cars given their big-volume status in the domestic market. But the global recession and incentives offered for fuel-efficient low-emission vehicles in big markets like Europe and the US have also made India a focal point for companies.

    Cheap labour costs and especially-tailored lower manufacturing tax (8% excise duty) make small car manufacturing in India a highly-competitive option which more and more companies are padding up for — Suzuki, Hyundai, Nissan, General Motors, Toyota, to name a few. China, in contrast, is more of a big car producer and has been hit by the global slump in demand following the economic recession. "Among major reasons for India is a favourable investment regime. While India allows for 100% FDI in auto sector, in China you can only be present through a joint venture with a local partner. If you use the country as a major export base, you have to share the profits with your JV partner, which no company would like to do," said Rakesh Batra, National Automotive Leader for E&Y in India.

    And while sharing profits may be a major reason, analysts point out that sharing technology with the JV partner may also be a cause of concern in China, considering the infamous expertise of its companies in culling out cheaper fakes at lower costs, even as they may be of a lower quality. India also scores due to its superiority in research and development brains.

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  3. ajay_ijn

    ajay_ijn Regular Member

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    i heard the FTA between SKorea and Europe is going to be a threat to Indias exports. because that would make it costly to export cars from India compared to Korea. Most of exports go to europe and most of the cars in India are exported by Hyundai, which is a Korean auto maker.
     
  4. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    Ajay,

    we are in the final stages of negotiating a fta with the EU, a deal that is expected sometime in the latter half of 2010 and we already have a cepa (comprehensive economic partnership agreement) in place with south korea. the fta agreement between eu and south korea is expected any time now but the delays have been happening for quite some time so when does the deal actually get signed is a matter of speculation at the moment. india gives an advantage of local consumption, very low labor costs, along with a tax regime in place which makes the costing of a smaller cars highly competitive and with the international market open for exports, there comes the advantage of economics of scale, also if south korea does challenge us we have the option of further lowering the tax structure in place at various levels, so i would highly doubt things are as fluid as might be speculated in certain corners, mind you there are industry lobbies at play which can get into spicing up things so as to extract their share of pie, which would happen eventually but sooner the better since any change in tax structure would effect the bottom line, which at the end of the day is the most important thing.
     
  5. ajay_ijn

    ajay_ijn Regular Member

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    FTA does take long time to sign. and euro is a big economy, largest destination for India so it would even more time.

    BTW Does Ford, Toyota not have a single small car to release in India?

    overall Hyundai has been impressive, they invested in India directly without govt support or joint venture unlike maruthi, they took away market from an established player. The major difference between both is Hyundai doesn't have car in Rs 2 to 3 Lakh category. still Hyundai has been far ahead as far as exports are concerned.
     
  6. F-14

    F-14 Global Defence Moderator Senior Member

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    i am wating for nissan and other jap majors excluding toyota to enter in a much bigger way
     
  7. ZOOM

    ZOOM Founding Member

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    There is no surprize to India's rising export all over world as far Automobile export is concerned. We should not forget to the fact that, there is a downfall in overall demand in every accessory we export all over the world particulerly to the US and European nation. Under such circumstances, there is a pressing need to diversify our export based markets from West to East especially targetting countries like China, Japan, Korea, Taiwan and host of Asean nations including Australia. If we ever need to maintain this momentum then all the automobile manufacturer need to mantain high standards of R&D with maximum focus on Fuel emission and foraying into the all new realm of Electric Car. Still as far as designs of most of the heavy Vehicles are concerned, they are still legging far behind in terms of their lower efficiency in Fuel emission.
     
  8. ajay_ijn

    ajay_ijn Regular Member

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    I think Toyota has already some share in SUV/MUV market. but like all others, they would also need a small car of atleast 4 lakh or even below that.
     
  9. badguy2000

    badguy2000 Respected Member Senior Member

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    For everyone's reference,

    According to Chinese definition, such small Vans are not looked on as "autos"
    In china, such small vans usually are called " Vans For Agriculture(l农用车)",because such small vans are mainly bought by peasants .

     
  10. Singh

    Singh Phat Cat Administrator

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    It would be tough for India to export their cars to the East at the moment. The established car producing major markets in the east like China, South Korea, Thailand and Japan have established their monopoly in SEA-Australia and it would be tough for India to break into them.

    What India ought to do instead is to find certain niches and become a global hub in them. For eg. VFM MuV's, quality small Cars, fuel efficient Diesel engines etc.
     
  11. ZOOM

    ZOOM Founding Member

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    That is the reason why I had suggested improving upon our R&D effort and at the same time we can certainly capitalize upon inking a JV with many of those east asian nations. Maruti has similar arrangement with Nissan, according to which Nissan is selling Maruti's A-10 under its own brand name.
     
  12. Daredevil

    Daredevil On Vacation! Administrator

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    Badguy, which part of english you didn't understand in the article and had to butt in with such cheap shot.

    Here
    It clearly says cars, vans, SUVs and trucks. May be your peasants buy the vans you have showed, in India peasants buy small cars not those vans :blum3:.
     
  13. Daredevil

    Daredevil On Vacation! Administrator

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    Its not just Hyundai, we also export Suzuki, mahindra, TATA cars and SUVs. But out main strength in auto exports is actually 2 wheelers. We export close 1 million bikes to other countries and Bajaj is leading all the way in this export market.
     
  14. F-14

    F-14 Global Defence Moderator Senior Member

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    i can attest to that DD the UAE is awash with pulsar DTSi's for all partical purposes there are more than 10 pulsars in my area alone
     
  15. Sridhar

    Sridhar House keeper Moderator

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    Hyundai to manufacture low cost car in India: report
    [​IMG] 16 September 2009

    The launching of the world's cheapest car, the Nano by Tata Motors in March (See: Ratan Tata launches Tata Nano) has prompted other car manufacturers to rush into making low cost cars for emerging markets with South Korean carmaker Hyundai Motors planning to bring out a 800cc low-cost car for the Indian and other emerging markets.
    The Japanese business daily Nikkei reported today that the world's fourth largest automaker in terms of units sold, Hyundai Motor plans to manufacture an 800cc new model car in India through its Indian subsidiary Hyundai Motor India Ltd.
    In an interview the Japanese newspaper, Lheem Heung-soo, chief executive of Hyundai Motor India Ltd, said that the new car would be manufactured at its Chennai factory.
    He added that although the car's roll out was still years away, abd the retail price would be in the region of $5,000-$6,000 (Rs2,42 lakh – Rs3 lakh), twice that of the Nano.

    But, in March, the Korean car maker had announced that it plans to come out with a small car for India and China priced at around $3,500 (Rs1.77 lakh). (See: How will rivals react to the Nano?)
    Although the base model of Nano cost Rs125, 151 and the luxury model Rs185,498, it shows how difficult it will be for Tata Motors rivals to compete as far as pricing of low cost cars are concerned.
    Another rival to be watched is Maruti Suzuki, India's biggest seller in the 'entry level' car segment.. Its two hot-selling models, the Alto and the venerable M-800, both cost over Rs2 lakh.
    Hyundai's new car would be sold in emerging markets as well as the Indian market, where Hyundai has the second largest market share with its popular flagship brand, the new version of Santro.
    It also plans to launch its sports utility vehicle Santa Fe in India by next year, as well as in emerging markets.
     
  16. Antimony

    Antimony Regular Member

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    I am indulging in my favourite pastime of complicating matters here:blum3:

    How would this picture change if Chinese and Indian acquisitions abroad are considered?

    For e.g., The TATA group bought some British auto brands, while the Chinese recently acquired the HUMMER. Also, I was listening in to NPR this morning, and they indicated that some Chinese company is trying to buy SAAB from GM, or something like that.
     
  17. fuzi

    fuzi Guest

  18. xebex

    xebex Regular Member

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    Exterminating an Emo means one low-life less!
    we are neither talking about largest automobile maker nor largest market......we are talking about the export here. u can make a billion cars and could be easily comused by chinese people, but to export that billion cars, it ought to be good, i mean real good. That is, it should be convincing to foriegners that ur vehicle is top notch compared to anybody.

    India has an advantage in exports of small cars category compared to china and that is what the article says.
     
  19. fuzi

    fuzi Guest

    india friends ,plz dont compare any industry with china ,most of your cars driving on your road were not allowed driving on our road ,without ABS without airbag without ESP OR even aircondition ,india friends , chinese wont call them cars,
     
  20. Sabir

    Sabir DFI TEAM Senior Member

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    Who exporting to China? There are other countries in world. :blum3::blum3::blum3:
     
  21. RPK

    RPK Indyakudimahan Senior Member

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    Chinese Friend how you came to conclusion that Indian cars dont have airbag, ESP, or AC, without there how could the western countries accepted in their roads? can give your source to support your claim?
     

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