Workers assemble cars in the Hyundai Motor India plant at Kanchipuram in Tamil Nadu. Photo: Reuters
Workers assemble cars in the Hyundai Motor India plant at Kanchipuram in Tamil Nadu. Photo: Reuters

Indian auto industry has long been known for export of mini hatchbacks, but of late it has moved up the value chain and is evolving into an export base for mid-size cars and compact SUVs. This is primarily due to growing confidence of multinational car makers in their Indian units to deliver quality products at a low cost.

When the South Korean automotive maker Hyundai Motor Company launched its new generation mid-size sedan Verna, it shifted its entire production from its home base to India.

Hyundai India plans to build 130,000 units of Verna at its plant in Chennai and export 80,000 units. It hopes to achieve this target in a couple of years and would export Verna to Latin America, Africa, Gulf countries and several Asian countries. Hyundai already exports its compact SUV Creta from India and it shipped out 45,000 units last year.

In terms of profit contribution, India is second only to Czech among the Korean manufacturer’s overseas bases, ahead of other key markets including the US and Brazil.

For German carmaker Volkswagen, India has become the largest hub to manufacture and export of its mid-size sedan Vento. Its Chakan plant near Pune manufactured 80,000 units of Vento in 2016 and nine out of 10 cars were exported.

American automotive giant Ford, which has a manufacturing unit in Chennai, has so far exported more than 200,000 of its compact SUV Ecosport ever since it began production in 2013. It also has plans to export the same to the United States in 2018. The company had exported 151,638 vehicles in 2016, up from 99,143 vehicles in 2015.

While for some car makers low cost is a major attraction for exports, for many others it is the lacklustre sales in Indian market. They look towards exports to augment revenue and viability of their India operation.

US car maker General Motors stopped its India sales in May this year, but it continues to manufacture cars from its plant in Talegaon, Maharashtra, for exports to Latin American countries.