Amid muted demand at home, exports offer relief to auto companies

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Home and away: The term isn’t the exclusive preserve of an ultra-competitive soccer league. It is a proven de-risking strategy in business, particularly personal mobility, where surprising gearshifts in markets worldwide often stump automakers.

Take, for instance, the two-wheeler industry for which India is the biggest market worldwide. Now, the home market isn’t firing on all cylinders, to be honest, but several countries in Africa and Latin America aren’t homebound and they are buying bikes — made in Maharashtra, Haryana, or Tamil Nadu.

Two-wheeler exports almost doubled and garnered a turnover of $1.1 billion in the first five months of 2021 — making up for almost 63% of last year’s business. As the markets in Latin America, Africa and SouthEast Asia remained largely unaffected, exports from India zoomed.

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Similar is the case with car and truck makers. For , exports in June were the highest ever at 17,000 units. In the first six months of 2021, Maruti’s exports swelled by 138% to a little over 80,000 units. In the first five months of 2021, exports of twowheelers and passenger cars rose 94% and 20%, respectively, to 1.89 million and 0.18 million units.
says the steady growth in twowheeler exports is encouraging and is expected to support industry volumes in FY22, although volatility overseas may pose downside risks.

Rohan Kanwar Gupta, VP & sector head, corporate ratings, ICRA, says demand in export markets has remained robust, with volumes at 2.8 lakh units in June 2021, a quarter more than June 2019. “Some participants continue to quote that scarcity in containers is constraining exports; with an expectation of gradual resolution of this problem, export volumes are likely to continue to support industry volumes in the near term,” said Gupta.

Interestingly, two-wheeler exports for five months were equivalent to the total domestic sales for the first time in many years, data from SIAM showed. Against average two wheeler exports of 3-3.4 million, at the current pace, overseas shipments may hit a record of 4.5 million if markets overseas don’t shut down to tame the virus. Historically, exports of two-wheelers have been in the range of 15-20% of total domestic volumes.

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Largest two-wheeler exporter

’s overseas sales rose 68% to 11.16 lakh units in the first six month of 2021 and accounted for nearly half of India’s total two-wheeler exports. The company is witnessing healthy demand from Africa and Latin America, although demand from the ASEAN markets is yet to recover. The maker of Pulsar and Chetak expects exports monthly rate to be two lakh units in the second quarter of FY22, aided by recovery in demand and container availability.

Bajaj Auto has been able to maintain export commitments despite challenges on container availability, semiconductor shortage and supply disruptions.

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Traction is just not limited to lowpriced Boxer. Bajaj Auto has seen a gradual increase in the share of premium motorcycles exports.

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