Rupee depreciation brightens export prospects of Automakers

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A weakening rupee has set Indian automobile companies revising their export targets, reviewing future outlooks and exploring new markets to push overseas sales.The rupee depreciated against the dollar from Rs 40 in the beginning of the fiscal to Rs 46 currently.Hyundai Motors India, the country’s largest passenger car exporter, is planning to revise its export target in view of the favourable currency rate and also look at new, smaller markets. The Company had set an export target of 2.12 lakh units for the current fiscal, but has revised it to 2.6 lakh units.Hyundai has exported close to 97,000 cars so far this year, a 66 per cent year-on-year growth. Hyundai is presently exporting to 96 countries and are present in all the major markets.The rupee depreciation happened very recently and the company is still working out its impact.

Mahindra & Mahindra is planning to explore new regions with their tractors and utility vehicles. They are planninng to increase thier tractor sales in Africa and utility vehicle sales in Latin America.The company has set up assembly plants in these regions. The company’s export of utility and three-wheeler vehicles showed a 33 per cent increase at 5,182 units up to August this year, compared with the same year-ago period.

Rise in margins

Indian automobile manufacturers have been struggling under adversities in the domestic market, ranging from escalating input costs to high interest rates. Automobile exports, which have been on the upswing for sometime now, are likely to get a further push due to the depreciation of the rupee.

Depreciation has been so sudden,but it remains to be seen whether if it will remain the same for another six months.TVS, the second largest two-wheeler exporter from India, sold 73,392 vehicles in markets abroad in the current fiscal, posting a 49-per cent growth. But it is certain that our export margins will substantially increase. Exports constitute 10 per cent of the total revenues of the company.

According to the latest report from Society of Indian Automobile Manufacturers, total vehicle exports from India till August, across all segments, is up 24 per cent year-on-year at 1,40,728 units.

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