Monday, August 03, 2015

India's vehicle exports to Latin America were an impressive 1.82 billion dollars in 2014-15

India' s exports of vehicles including two and three wheelers to Latin America were an impressive 1.82 billion dollars in 2014-15 ( April to March). The cars accounted for 1.29 billion dollars, motorcycles- 460 million dollars and three wheelers- 63 million dollars.

Mexico is the leading destination for exports of cars at 788 million dollars. Exports to Chile were 117 m, Colombia-110 m, Peru-112 m, Uruguay-43 m and Central America- 80 m

Latin America accounted for 23 % of the total car exports of India which were 5.643 billion in 2014-15.

Colombia is the top destination for two wheeler exports at 273 million dollars. Exports to Mexico were 63 m, Guatemala-41 m, Peru-35 m and Argentina-27 m. Exports to Central America as a whole were 66 million dollars.
Latin America's share of India's total exports of motorcycles was 23% in 2014-15.

Peru is the leading destination for the three wheeler exports at 35 million dollars. Other export markets include Mexico, Colombia and Central America.

Bajaj, Hero and TVS have successfully established their brands in the region. Pulsar of Bajaj is said to be the number one sports motorbike brand in some countries of the region. It is creditable that Bajaj is the market leader in motor cycles in Colombia and Central America. Given the tough competition given by low-cost motorcycles from China and the established Japanese brands, the Indian companies have to be commended for their export performance and brand establishment in Latin America.

As millions of people come out of poverty line ( thanks to the pro-poor government policies such as conditional cash transfers ), there will be more demand for two and three wheelers in the region.

Brazil, Argentina and Venezuela remain virgin markets for Indian vehicle exporters. Import restriction is the main reason. When their economies recover in the next few years, there is significant scope for Indian exporters.

Although Mexico and Brazil are big hubs of automobile manufacturing, some multinational companies find it cheaper to produce cars in India and export them to Latin America. 

India's exports of vehicles have been increasing rapidly in recent years. For example, India's export of cars to Mexico increased by 46% and to Colombia by 33% from 2013-14 to 2014-15.  There is scope for India to increase the vehicle exports to 4 billion dollars by 2020 if the exporters keep up their marketing campaign. The Government of India could facilitate by revitalizing the Focus-LAC promotion programme.

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