Saturday, January 20, 2007

Hyundai overtakes Maruti on export track

Action is revving up in the auto exports sector. Domestic sector heavyweight Maruti may have established an iron hold on the small car segment in India, but the company is struggling to replicate its success in export markets. In a continuation of the trend that started two fiscals ago, the market leader’s exports have dropped by a third to just over 25,000 between April and December 2006.

On the whole, exports are on the rise. From 129,291 units in 2003-04, export volumes have gone up by 36 per cent to 175,772 units in 2005-06, and are tipped to cross the 2 lakh mark by the end of the current fiscal. But Maruti’s has been a show in contrast.

Arch rivals Hyundai and Tata Motors are having a field run. Hyundai not only overtook Maruti as the biggest exporter of passenger cars in 2004 but has also created a sizeable lead in just two years. The Korean carmaker has exported almost 88,000 units in this fiscal so far and has posted the highest ever exports in a month at 12,288 units in December 2006.

Tata motors, a large exporter of commercial vehicles, has also witnessed a spurt in exports in passenger cars, exporting 11,517 units in the fiscal so far as against just 3,954 units between April and December 2004. In all of this Tata’s market share has gone up from single digits to almost 11 per cent while Hyundai which had a third of the pie two years ago now commands more than half of it.

Maruti’s share has halved between 2003 and 2006. The main reason behind Maruti’s falling fortunes has been Suzuki’s decision to manufacture Swift from Hungary for the European markets. With a prominent exporting block out of the way, Maruti has been exporting Swift to neighbouring and African countries.

However, the scenario may see another slugfest in 2008 when Maruti launches a new small car in collaboration with Nissan. Backed by the new car, Maruti has set an export target of 400,000 units by 2010 which will catapult it back to the numero uno position. But that means a growth of 265 per cent per annum - a feat that industry watchers say is difficult but not impossible.

“Hyundai has utilised India’s market perfectly and has already done what others are now trying to do. With the industry taking exports seriously, and a Tata or a Hyundai car now available at almost all corners of the world Maruti’s target will be that much harder to achieve,” said an industry analyst.

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