Auto exports too sees drop, EEPC India seeks faster refund of taxes, steel availability at global prices

New Delhi, Sept 4 (KNN) Adding to the domestic woes of automobile manufacturers along with their component vendors, their export market has also remained depressed, in sync with other key engineering export items from the country, an EEPC India analysis has shown. 

Automobiles, comprising motor vehicles/cars, two/three wheelers and auto parts and components, showed a decline of 3.82 per cent in July, 2019 over the same month last year.  Aggregate exports from these three segments dropped year on year from USD 1.33 billion to USD 1.28 billion for the month under review.  

The decline in the automobiles was led by the drop in y-o-y exports of motor vehicles/cars by 8.3 per cent and two and three wheelers by 5.5 per cent. However, there was a modest rise of 3.90 per cent in auto components and parts.

For April-July period of the current fiscal, all three segments of automobiles recorded a decline of 4.31 per cent, dropping to USD 5.10 billion from USD 5.33 billion.    

Commenting on the trends, EEPC India Chairman Ravi Sehgal said, “In a way, the auto makers face a double whammy. Exports too are laggards even as the fall in the domestic market is reported to be quite sharp. It is time to take immediate measures like faster refund of state and central taxes. Besides, steel availability at international prices would be crucial to make automobile exporters competitive."

Sehgal said, in the wake of slowdown in the domestic market, exports should have driven the growth in key engineering sectors like automobiles, iron and steel. 

“There is a strong connect between manufacturing and export of engineering goods. As per the overall GDP data for the first quarter of the current fiscal, manufacturing could barely keep its head above water with 0.6 per cent growth. But engineering exports during the same period slipped badly and fell by 1.86 per cent''.

The EEPC Chairman said, while Commerce and Industry Minister Piyush Goyal is making all -out efforts to bring the exports back on the rails, the road ahead looks difficult given the deteriorating trade war between the two major economies of the world.

“Eventually collateral damage could be wide spread. It is time to be on our toes". 

While automobiles exports to Mexico, one of the major markets , managed a modest growth of about 4 per cent from USD 127 million in July, 2018 to USD 133 million in July 2019, shipments to the US dropped sharply by 35.75 per cent from USD 57 million to USD 37 million for the month under review.

For its part, the EEPC India is working in tandem with the government and is reaching out to the MSMEs in several manufacturing hubs with technology up gradation centres and opening chapters in Tier I and Tier II cities.