Nearly 18 years after it first exported a batch of 20 Santros to Nepal and went on to become India’s largest exporter of passenger vehicles, South Korean automaker Hyundai Motor India Ltd has lost the crown to Ford Motor Co.’s Indian unit in the quarter ended 30 June, data provided by Society of Indian Automobile Manufacturers (Siam) shows.
Ford India has now outpaced Hyundai for three consecutive months in shipping out vehicles and during the June quarter it led Hyundai by 15,813 units. During the period, Ford exported 48,971 units, up 54.37% over the year ago period, as compared with 33,158 units shipped by Hyundai, down 16.65%, according to Siam data.
Off late, Hyundai has softened its focus on exports, largely to meet domestic demand, and has held back from adding additional capacity in the form of building its second greenfield factory in the country.
What is surprising though is that despite this Hyundai’s domestic performance has also been below par. Its sales in the Indian market during April-June were flat at 1.24 lakh units compared to the previous year even as its competitors such as market leader Maruti Suzuki India Ltd grew at 14% in the same period.
Hyundai, however, is expected to receive a boost in sales with the launch of its next-generation Verna sedan, which is likely to be introduced in the September quarter.
Better shipments have come as a shot in the arm for the Indian unit of Ford. The Detroit-based company is facing probing questions by investors over its decision to continue operations in India, especially in the wake of its arch rival General Motors Co.’s decision to pull out of the world’s fastest growing passenger vehicle market. For now, Ford will continue to build its business in India, according to people in the know of the matter who did not want to be named, even as its operations will be closely watched by Jim Hackett-led management. In May, Bill Ford-led board of Ford Motor removed Mark Fields from the post of the company’s chief executive and gave charge to Hackett who is known for turning around companies such as furniture maker Steelcase.
Ford, along with Volkswagen India Pvt. Ltd, Nissan India Pvt. Ltd and General Motors India Pvt. Ltd, has tweaked its strategy to focus on exports to make its India business operationally sustainable. Cheap labour and raw material cost offer better returns on export of vehicles, especially to countries where car purchasing power is higher. Hyundai exports to over 90 countries in regions such as the middle-east, Africa, Asia and Latin America.
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