Indian Automakers Find Export Markets for Smaller Cars as Domestic Demand Shifts

New Delhi, May 18 (KNN) Indian automakers like Maruti Suzuki, Hyundai, Kia, Citroen, Volkswagen, Honda, Nissan and Renault are increasingly finding export markets for their smaller, compact car models even as domestic consumer demand shifts towards SUVs and larger, feature-packed vehicles.

Once dominating India's passenger vehicle market with a nearly 50 per cent share, the small car segment now accounts for less than 30 per cent of total sales as SUV trends have significantly impacted sales of compact cars and sedans in recent years.

In fiscal year 2017-18, small cars made up 47.4 per cent of the Indian market, dropping to 46 per cent in 2018-19 and 46.5 per cent in 2019-20.

However, automakers are witnessing high demand for these smaller models in export markets like South Africa, Saudi Arabia, Chile, Mexico, the Philippines and Peru.

In the current fiscal year 2023-24, Maruti Suzuki alone exported 280,000 units of cars like the Swift, Dzire, S-Presso and Baleno to such markets. Hyundai also exports sedans like Verna, Aura and Grand i10 Nios.

Executives remain optimistic about a potential revival of small car demand in India as well by 2026-27, driven by increasing two-wheeler customer upgrades and improved affordability.

The rise in hatchback prices from recent safety and emission regulations had impacted buyer sentiment.

Despite the current SUV wave domestically, automakers see opportunities in both export markets for compact cars as well as an eventual rebound for the small car segment back home in India in the coming years.

(KNN Bureau)