How Maruti and Hyundai boosted auto exports from India in 2022

A Maruti car
A Maruti car

Global Market
by 5paisa Research Team Last Updated: 2023-01-04T11:24:03+05:30

For India's auto industry, the news just keeps getting better. Notwithstanding global headwinds, passenger vehicle exports from India grew at a fast clip in 2022, led primarily by a 28 per cent growth in shipments by the country’s largest carmaker — Maruti Suzuki.

Citing data put out by the Society of Indian Automobile Manufacturers (SIAM), the Business Standard newspaper reported that the overall passenger vehicle exports clocked 11 per cent growth during the first 11 months of 2022, to 535,352 units. The December export data is yet to be released by the automotive industry body.

How well has Maruti done relative to its competitors?

Maruti beat its South Korean rival Hyundai Motor India (HMIL) in exports in 2022 and managed to maintain momentum. HMIL, too, saw strong growth of 13.7 per cent in exports in 2022, to 148,300 units from 130,380 units in 2021, reveals data.

Maruti, on the other hand, exported 263,068 units in 2022, up from 205,450 units in 2021.

Maruti’s exports grew threefold from 2020 (85,208 units) and more than twofold versus the pre-pandemic year of 2019 (107,190 units).

What does Maruti have to say about these numbers?

According to the report, Maruti Managing Director and Chief Executive Officer Hisashi Takeuchi said: “Crossing the 200,000 milestone in exports for the second consecutive year signifies the trust, quality, reliability, performance, and affordability of our products. This achievement further aligns with our strong commitment to the Government of India’s Make in India initiative to manufacture products to delight global customers.”

He added, “We are thankful for the support from our parent company — Suzuki Motor Corporation — to enable us to leverage a wider distribution network across the globe. Further, adding more models to our portfolio helped sustain excitement in the export markets.”

Maruti’s export market network got a leg-up, thanks to its partnership with Toyota Motor Corporation, the report said.

What do experts have to say about Maruti’s performance?

According to the report, Puneet Gupta, director, S&P Global Mobility, pointed out: “Last year has been one of the best years for MSIL. It has since shown manifold increase. One reason is that it has partnered Toyota that is using the Suzuki portfolio for exports also. The upside: India’s largest player is not only focusing on the domestic market, but on exports as well.”

For instance, the Grand Vitara, produced by Toyota Kirloskar Motor, is exported from the country, apart from domestic sales.

What do experts have to say about Hyundai?

Hyundai India, which is a critical part of Hyundai Motor Company’s global export hub, exports to around 85 countries across Africa, West Asia, Latin America, Australia, and Asia Pacific. According to experts cited by Business Standard, a major challenge with both Hyundai and its affiliate Kia is to maintain the pace of exports, as well as rising demand from the domestic market. 

“Exports have become more of a constraint for Hyundai and Kia because of limited production capacity. Their exports in 2022 were good but in the years to come, they will be in a pickle whether to export or sell in the domestic market,” said Gupta.

He added that for Hyundai, focusing on the domestic market is crucial as it cannot afford to cede market share.

Hyundai posted its highest-ever sales in the domestic market in 2022, selling 552,500 units, up 9 per cent from 505,033 units in 2021. It has an installed capacity of roughly 750,000 units per year.

What are the major red herrings still remaining when it comes to car exports?

One major drawback for the Indian export market in recent years was the withdrawal of players like Ford and General Motors. While upbeat about the domestic market that is expected to grow 5-6 per cent in 2023, experts indicate that to sustain this domestic growth, Indian manufacturers will have to compromise on exports.

Mahindra & Mahindra, too, saw a 12.2 per cent jump in exports for 2022, including exports from its farm equipment sector.

According to SIAM data, Mahindra's passenger vehicle exports saw marginal dip, from 6,376 units in April-November 2021 to 5,444 units during April-November 2022.

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