Now a car story: TN Ninan in the FT
FT.com / Columnists / Business Standard - Now a car story
[India's] export of automobiles has grown faster than software over the last four years (more than 35 per cent annually). Admittedly, that is from a low base, and the total exports of vehicles last year fetched no more than $2.5bn. But the pace is slated to pick up, not slacken; and in less than 10 years the industry hopes to be exporting vehicles worth $35bn - twice as much as the software guys did last year. Add the better-known success story on automobile component exports (like forgings), and it does look as though automobile manufacture will be a new arrow in the country’s quiver.
At nearly 7m units a year, India is the second-largest two-wheeler manufacturer in the world, next only to China. In cars, India has just crossed the million mark; 10 other countries have done that before India, but if you go by the figures provided by the Society of Indian Automobile Manufacturers, none of them is growing as fast as India’s industry. And in buses, believe it or not, India makes a sixth of the global total. Even in medium-size tractors, the country does very well in the global pecking order. This varied base is now being used as the launch-pad for getting into other markets.
The leading makers of two-wheeler companies (Hero-Honda, Bajaj and TVS) are all doubling capacity, adding another 6m to their present total. The leading players in the domestic car market have their eyes firmly set on exports. Hyundai wants to treble its car exports from 100,000 to 300,000; Maruti is developing a new car for the export market (beginning with 100,000 car exports); and Tata Motors wants to double exports every two years. Ford too has decided that India will be a sourcing point for some markets. With Toyota now set to enter the small car segment, the finance minister may well have been right in spotting the opportunity to make the country a hub for small car manufacture. Export of a million cars five years from now looks a distinct possibility.
[India's] export of automobiles has grown faster than software over the last four years (more than 35 per cent annually). Admittedly, that is from a low base, and the total exports of vehicles last year fetched no more than $2.5bn. But the pace is slated to pick up, not slacken; and in less than 10 years the industry hopes to be exporting vehicles worth $35bn - twice as much as the software guys did last year. Add the better-known success story on automobile component exports (like forgings), and it does look as though automobile manufacture will be a new arrow in the country’s quiver.
At nearly 7m units a year, India is the second-largest two-wheeler manufacturer in the world, next only to China. In cars, India has just crossed the million mark; 10 other countries have done that before India, but if you go by the figures provided by the Society of Indian Automobile Manufacturers, none of them is growing as fast as India’s industry. And in buses, believe it or not, India makes a sixth of the global total. Even in medium-size tractors, the country does very well in the global pecking order. This varied base is now being used as the launch-pad for getting into other markets.
The leading makers of two-wheeler companies (Hero-Honda, Bajaj and TVS) are all doubling capacity, adding another 6m to their present total. The leading players in the domestic car market have their eyes firmly set on exports. Hyundai wants to treble its car exports from 100,000 to 300,000; Maruti is developing a new car for the export market (beginning with 100,000 car exports); and Tata Motors wants to double exports every two years. Ford too has decided that India will be a sourcing point for some markets. With Toyota now set to enter the small car segment, the finance minister may well have been right in spotting the opportunity to make the country a hub for small car manufacture. Export of a million cars five years from now looks a distinct possibility.
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