[anmol2k4]

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India Leaps Ahead of China in Auto Exports

Sept. 8 - A newly confident and assertive India has long looked enviously at China as the country has apparently sped away in terms of export capabilities and its desire to be the world’s factory shop floor. Often you’ll hear the term “one party state” given as a reason for China’s superiority as the nation’s drive forward seemed unencumbered by democracy. India, mired in democratic squabbling and political horse trading, was only able to watch on with envious eyes.

However, that is now changing. The Indian domestic market may be just 19 percent of China’s — which has overtaken the United States 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 as other countries (including China) have suffered a slump. India’s auto exports have, for the first time, overtaken that of China. In the seven month period from January to July this year, India exported a total of 230,000 cars, vans, SUVs and trucks, a growth of 18 percent as China’s exports tumbled 60 percent in the same period to 165,000 units.

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 also scores due to its more liberal foreign investment policies in the auto sector, and high quality manufacturing which stems from its growing prowess in research and development. Tata’s acquisition of Jaguar and Land Rover has also given it expertise in design, R&D and overseas outlets that China has been unable to match, being content mainly to purchase bankrupt production lines from the likes of MG Rover and other increasingly discredited, energy consuming US models instead. That policy, coming on the back of a global financial crisis and more global awareness about energy consumption, may be backfiring as China’s auto strategy seems increasingly hampered by brands and technologies that are appearing increasingly old fashioned. Consequently, 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 auto manufacturers.

Cheap labor costs and especially-tailored lower manufacturing tax (8 percent excise duty) make small car manufacturing in India a highly-competitive option which increasing numbers of global companies are arriving in the country 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.

Additionally, China’s auto sector is restricted – a point not lost on the recent European Chamber of Commerce in China report criticizing China for not opening up its auto markets further to foreign investors. China insists on 50 percent Chinese ownership in its auto manufacturers – India does not and the R&D skills have poured into India rather than China as a result of both this, the greater assurances and protection of IPR, and the ability to go it alone and retain a greater share of profits.

[shortbread]

This is a great news especially taking into account the size of the Chinese car Industry via a vis ours. Hyundai deserves a lot of credit for being one of the first MNCs to realise India's potential as a manufacturing base for small cars. Everytime one sees a Amica, i10, i20 on foreign shores its quite satisfying to know its from India.
Maruti has also shown a lot of initiative in exports lately after just shipping a handful of 800s and Zens for decades. Its better late than never.
This is just the tip of the iceberg, Toyota, GM, Honda, Ford, Renault/Nissan, VW are all ramping up capacity and have new small cars in the pipeline, which will be made and exported from India.
Not to forget Indian players like Tata, M&M are steadily getting into the act as well.

[TeddyBear]

It is just a beginning for Indian Auto Industry. Though Maruti Suzuki started the export, till recently Hyundai is the biggest exporter. Now with A-Star export for Nissan get back them on Track.

Mahindra & Tata Wakeup! build world class vehicles for world market.

[GTO]

Kudo's to Maruti & Hyundai for establishing India as a base for small car exports. Of course, it has a lot to do with the substantial size of our local market for hatchbacks too. This trend will only extend to other brands who will use India not only for production, but also for heavy R&D. Renault / Nissan have a newly opened design center in Mumbai while Maruti has invested in one of the largest R&D complexes in North India. We enjoy inherent advantages in language, skill, value engineering, quality and - recently - govt. policies. The center must do whatever it can to extend, not negate, these further.

Just wait till the Nano's production has stabilised. Then, watch the export numbers shoot up through the charts!

Originally Posted by TeddyBear

Mahindra & Tata Wakeup! build world class vehicles for world market.

Well said. To their credit, Tata & Mahindra started manufacturing cars a century (or 1/2) after the top 5, yet that isn't an excuse for inconsistent quality. Top priority.

[Liverpool_Red]

Originally Posted by GTO

Well said. To their credit, Tata & Mahindra started manufacturing cars a century (or 1/2) after the top 5, yet that isn't an excuse for inconsistent quality. Top priority.

Definitely agree with that. Tata can now use the expertise in its JLR stables as well. If they can get their acts together we are going to have a fabulous era in the Indian Automotive industry.

[Parm]

Time for me to move back to India!

Ford is already exporting some of its models and which are made only for export and not for indian market!

[gshanky]

Good news for indian auto industry. Though the industry deserves a pat on the back, there are miles to go....
I can clearly see that things can only improve.

[karpusv]

All this is definitely going to improve the image of the economy as a whole. Expect better investements from more MNC's. New car manufacturers to enter shores.

And to top it all, maybe our government will wake up to the idea of having better road infrastructure.

[Liverpool_Red]

Was speaking to an uncle of mine on these export figures. Uncle is in multiple businesses and is well connected. He told me that all these figures being dished out by the government is manipulated to a significant degree to make the picture look more rosy. The government does it in both good and bad times., ie when the figures are really over expectation they are made more realistic and when extremely bad they are made to look more like a blip.

Any guys aware of this or am I being misled to believe?