LATAM becomes India’s largest auto export market

The Dollar Business Bureau 

Africa has been one of the most vital markets for Indian automobile exports over the past few years. But now, Latin America (LATAM) has become the biggest automobile export market of the country, overtaking Africa.

The export figures for the year 2015 showed that India shipped more than 25 percent of value of vehicles to the markets in Latin America as compared to 21 percent a year earlier. In the meantime, exports to Africa witnessed a drop for the first time in the past decade.

The export of vehicles from India, including cars, motorcycles, buses, trucks and chassis fitted with engines, stood $8.86 billion (Rs.59,360 crore) in the fiscal ended March, 2015. While total vehicle shipped remained stable, exports to Latin American markets surged 19 percent to $2.26 billion. 

There are huge costs of logistics involved in shipping vehicles from the country to Latin America, as it is 15,000 km away. However, auto manufacturers have been able to offset their costs due to the government's incentives under the 'Make in India' scheme, and the country's cost effective engineering capabilities that helped in manufacturing vehicles at competitive prices.

With declining oil and commodity prices, African countries proved to be a challenge for exports as falling oil prices affected the dollar revenue of several African countries. It was around this time that India trained its sights towards Latin America as a larger market for the country's shipment to balance the slowing exports to its traditional markets. 

The German car manufacturer Volkswagen led the automotive exports from India to Latin America, by shipping around 63,000 vehicles in the year 2015. Korean auto manufacturer Hyundai exported more than 49,000 cars to around 32 nations in the Latin American region. Several other auto manufacturers such as General Motors, Ford and Suzuki too played a major part in the huge shipments to Latin America.