Ford has beaten Hyundai to become India’s top exporter in H1 2017 – the six months between April and September 2017. Ford exported 82,347 units, registering a 11 % growth from the same period last year. Over the same period, Hyundai’s exports fell by 11.5%, and the company just exported 70,525 cars. This has pushed Hyundai to the second spot.
The reason for the lower exports from Hyundai could be its greater focus on the domestic market. In the domestic market, Hyundai has grown quite a bit in the last one year, but its factory capacity is limited. To meet the growing demand, Hyundai is diverting production from exports to the domestic market.
On the other hand, Ford is doing better in exports rather than in the Indian market, where its marketshare or volumes haven’t really grown by much. Since India is a low cost manufacturing hub that gives high profits to exporters, Ford is choosing to leverage this advantage by increasing its exports.
In fact, this is the reason why General Motors continues to operate in India as an export-only car maker. The car maker exported around 45,000 cars and is now the fifth largest car exporter. More importantly, exports went up by nearly 50 % as capacity that would otherwise be used for the domestic market is now allocated for exports.
Third and fourth slots in the car exporter lists have been taken up by Maruti (60,063 units) and Volkswagen (50,410 units). While Maruti is cutting exports to focus on domestic market, Volkswagen is going the Ford way and increasing exports to make up for low sales in the domestic market.
A number of global car giants are now exporting more cars from India than selling here. This increase in exports is what is allowing these companies to stay back in India. Otherwise, they’ll have to exit the market altogether, losing a lot of money that they invested in setting up large factories.