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Indian auto players fail in export markets - Views on News from Equitymaster
 
 
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  • Mar 31, 2000

    Indian auto players fail in export markets

    Majority of Indian automobile players have seen a declining trend in car exports from April-January'2000. Despite buoyant sales in the domestic market over the past year these companies are not making an in road with the export markets.

    As over the past year competition especially in the small car segment has increased with the entry of cars like Indica, Santro, Matiz offering a large choice to consumers. Hence to counter this competition and to sell their surplus production the Indian auto players were looking to raise their sales through exports. However these efforts have not materialised.

    * scooter sales

    The above figures show that the demand in the export market for Indian cars is not very positive. The reasons for this could be many: the quality of vehicles produced in India may not be up to the mark. Others would be that though the global market has been reasonably buoyant structural issues of Indian car makers need to be addressed. The main issue would be to have large marketing and distribution channels. This would require setting up offices and increasing the costs of auto makers. Besides as the international markets are very competitive, the Indian auto companies will have to offer discounts and other incentives.

    The Indian auto makers need to get their act together and decide whether they will be in a position to incur high expenditure to promote their goods and increase spends in research and development to improve the quality of their models.

    What is surprising though is that the foreign car makers like Hyundai, Matiz and Mercedes which have strong distribution networks abroad are not being able to sell their goods internationally. This would be a pointer towards the fact that the Indian made foreign car models are not upto international standards.

     

     

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