On auto pilot

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On auto pilot

Thursday, 28 July 2016 | Kushan Mitra

On auto pilot

Today the i10, Grand i10, Xcent and Creta, which are made in Sriperumbudur, are being sold to customers across the world

At the Frankfurt Auto Show in 2015, the now Chief Executive Officer of Suzuki Motor Corporation came on stage to introduce his latest car, the Baleno. This was the launch of the vehicle for the European market and a chance for the Japanese carmaker to strengthen its global position. The car itself, when you opened the door and took a look on a lower panel, was “Made In India.”

Indian vehicles, that is passenger cars, utility vehicles, three-wheelers, motorcycles and scooters, are sold across the world — from Australia, where you can see Indian pick-up trucks from Mahindra and Tata to Nigeria where Bajaj Boxers are extremely popular and also across Western Europe where cars made by Maruti-Suzuki, Hyundai and Renault-Nissan share the roads.

While Indian vehicles of all types are exported to neighbouring countries, they have also tasted success in demanding Western markets. And this is taking place while the Indian automotive market itself has been growing at a tremendous pace over the past two decades despite increased competition in India. last year, India produced just short of 24 million vehicles of all sorts, and total exports of 3.6 million vehicles.

In the past decade, Indian manufacturers have adopted modern manufacturing techniques and made their cars to global standards. The arrival of Hyundai in India in the mid-1990s really changed the game. Hyundai, which is today a massive global manufacturer, was then an upstart in the world. However, with a huge investment in India, the Korean company made their plant at Sriperumbudur outside Chennai and have exported close to two million vehicles that are “Made In India” with cars that are made at the state-of-the-art factory in Chennai running in Africa and latin America and being sold to the highly demanding and competitive markets in Western Europe. Today the i10, Grand i10, Xcent and Creta, which are made in Sriperumbudur, are being sold to customers across the world.

But Hyundai’s lead in exports have been followed by the likes of Ford and Maruti-Suzuki which have both been making cars for export from their Indian factories. The Baleno, which has been a runaway sales success in India, is only being manufactured in India for global markets and currently close to 2,000 Balenos are being exported every month. Indeed, Maruti is also exporting the “Made In India” Baleno to their parent company’s home in Japan and eventually the company plans to export close to 6,000 Balenos every month to over 100 countries in the world. You can look at a Baleno in any international market and know for a fact that the car you see was made by Indian workers at a Maruti factory. However, the Baleno came late to the export charts last year, but Maruti’s export superhit over the past decade has been the Alto with over 50,000 units exported last year.

Ford has been exporting out of India for over a decade now, starting with the Ikon which was exported in kit form. Now the Figo, Aspire and Fiesta are all sent out from here. But the big export for Ford is the EcoSport with over 80,000 units exported last year, the single largest exported product from India.

The company that has become the biggest exporter out of India is Nissan; the joint-venture factory they have outside Chennai, which is clearly India’s car exporting hub with Hyundai and Ford factories also located nearby (Ford has moved new manufacturing projects to Sanand in Gujarat now) is India’s largest car exporter today. While the Nissan Micra and Nissan Sunny might now have set the sales chart alight in India, they are export hits. Exported to close to 80 countries out of India over 100,000 units were exported by Nissan in the last fiscal year. And a German car that is “Made In India” and sold outside IndiaIJ Well, the Volkswagen Vento is just a car like that with over 63,000 units exported last fiscal.

But it is not just cars that are exported outside India. Indian manufacturers Hero MotoCorp, Bajaj Auto and TVS have made huge inroads in global two-wheeler markets. Concentrating on emerging markets with similar characteristics to India with younger demographics, Indian companies such as Hero have also established factories abroad. Hero is manufacturing motorcycles in Colombia and is making a new one in Bangladesh. Yet, motorcycles that are made in India are being sold across the world.

Bajaj Auto has been particularly successful, selling not just motorcycles but also their auto-rickshaws and now the “Qute” quadricycle abroad. In fact, Bajaj has established its brand so well in some latin American markets that Chinese companies are producing imitations of their Pulsar motorcycle.  Bajaj auto-rickshaws might seem awfully common on Indian roads but they are equally common on the roads of Egypt and Sri lanka. Bajaj’s success in exports has not only enriched their shareholders immensely, with the company becoming one with the highest percentage of net profits in the Indian automotive space. In fact, Bajaj’s popularity in some African countries is so high that their motorcycles actually command a premium vis-a-vis their Japanese rivals.

And the legendary Royal Enfield motorcycles are a fixture on roads. Recently late-night entertainment host and motoring aficionado Jay leno featured the Bullet on his television show. Enfields, which are assembled in a factory with a large female workforce, are sold not just in the United States but also in Europe.

Indian buses from Tata and Ashok leyland are a fixture on the roads of Africa. Indeed new bus and truck manufacturers such as Eicher and Mahindra are making inroads in the global bus market. Indian trucks as well are building roads and transporting material in developing economies.

The aim to make India a global automotive hub is not just a dream anymore, Indian cars, motorcycles, trucks and buses are exported to over 120 countries across the world. Whether they are made in Sriperumbudur, Gurgaon, Sanand or Jamshedpur, every day cargo ships are taking containers filled with Indian products for customers across the world to drive. There is no surprise to see an Indian brand or an Indian-made car or motorcycle abroad anymore. India is not just the world’s third-largest car market, it has become a global hub for small cars and motorcycles.

With continued government support and a skilled workforce, Indian manufacturers have a clear lead in this sector. The automotive industry is a “Make In India” success story and it can continue to be.

The writer is an auto and tech expert

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