Two-wheeler exports from India are down almost 11 per cent in the first quarter of this year. This decline has pulled down the overall two-wheeler exports by 8 per cent. According to sources, the reason for this is the dropping crude prices and the resultant forex crisis in a large number of Latin American and African countries.
Hero, Bajaj, TVS and others, which are major exports players to these markets are affected. Surprisingly, the only manufacturers to show profits are Honda and Royal Enfield.
Bajaj clocked a 17 per cent drop in the April-June period at 3,23,660 units, down from 3,89,417 units in the previous first quarter of 2015-2016. TVS exports dropped 3 per cent to 89,265 units from 92,068 units in the same period. Hero's exports, which jumped 53 per cent to hit 2,00,140 units from 1,30,763 units in 2014, grew just 5 per cent to 2,10,409 units in 2016.
In case of Royal Enfield, it is not largely affected because it does not target the Latin American and African markets. Royal Enfield saw a growth of 82 per cent because of its demand in the Southeast Asian countries.
A Hero spokesman said, "There are indeed strong headwinds in the export markets on account of the sharp depreciation of local currencies in several countries in Latin America and Africa, this has resulted in a massive liquidity crunch, leading to volatility in these economies. In view of these developments, we have done a quick review of our global business strategy and realigned our resources.”
Y S Guleria, Senior VP (sales & marketing), Honda said, "We are not directly reaching these export markets but instead supplying to Honda Motor Japan. Our window of export opportunity is limited on account of domestic demand. Beginning of the year, our target was 8 per cent growth in exports. But so far our order acceptance has been 2,15,000 units compared to 2,00,000 last year up 7.5 per cent. We may revise later in the year depending on domestic demand and available capacity."
Source - ETAuto
