Proactive export strategy has aided Maruti Suzuki to minimise the impact of slow down in major markets like Europe. With its aggressive export diversification plan, India’s largest carmaker has significantly increased its exports to non-European markets, which now account for about 65 per cent against 25 per cent two years ago. At present Maruti’s top five export markets are outside Europe.

The company, which saw production disruptions due to labour issues during last year, has reported about 12 per cent fall in exports at 102,855 units during April 2011-January 2012 period. With major contribution from non-European markets, Maruti is likely to end the present financial year with total exports of about 125,000 units, which will be about 10 per cent lower than the previous year’s volumes.

“Two years back, our exports to Europe were about 75 per cent. This month Europe’s share is only 35 per cent. Sensing the slow down in the region, we started developing alternative markets and today our top export destinations are non-European markets that include Sri Lanka, Peru, Indonesia, Chile and Algeria. With focused strategy, non-European share has been increased to 65 per cent from 25 per cent two years ago. This year, our European exports reported decline of 30 per cent, while non-European reported a rise of 3 per cent,” Mayank Pareek, managing executive officer (marketing and sales), Maruti Suzuki India told Financial Chronicle.

“Our exports to Europe will register flat volumes or fall by the end of this financial year due to economic crisis in the region. We will focus on increasing our exports to other markets,” he added.

With drop in new car sales in major markets such as UK, France, Italy, Spain, Europe’s total new car sales declined by 1.7 per cent at 13 million units during 2011. Germany was the exception as demand for new cars grew by 9 per cent and remained the largest market with a total of about 3.2 million new registrations, followed by France (2.2 million units) and the UK (1.9 million units), according to European Automobile Manufacturers’ Association.

Pareek said most of the non-European markets that the company has been tapping, are potential growing markets. The demographic profile in these markets is same as in India – not very rich, but growing middle class with aspirations to buy cars.

Maruti, the second biggest car exporter from India, has been selling a range of its made in India models to overseas markets. These include Maruti 800, Alto, Zen Estilo, Ritz, A-Star and Swift that were well received in Europe due to its higher efficiency and lower emissions.

The company is also contemplating selling the new Maruti Swift Dzire in other markets. However, it seeks to focus on the domestic market initially for the new model, and then will start focusing on overseas markets as it envisages good export potential for the revamped entry-level sedan.

During the first nine months of present financial year, passenger car exports from India grew by 18 per cent at 368,862 units, compared with 311,826 units in the same period previous year. Hyundai remained the largest exporter with total export volumes of 186,377 units, followed by Maruti at 87,125 units and Nissan at 70,013 units.

balachandarg@mydigitalfc.com