Indian carmakers are reaping the benefits of the incentives offered by the governments of Germany, France and the UK to people exchanging their old cars for new fuel-efficient ones.
The country's largest car exporter, Hyundai Motor India, recorded its highest export growth rate last month while Maruti Suzuki is raising its export target, as the scrappage policy in Europe that gives €750-5,000 (Rs 50,000-350,000) to people buying fuel efficient cars has led to an increase in demand for their small cars.
The 11-year-old subsidiary of Korean carmaker Hyundai Motor recorded a 33% growth in exports in June to 24,241 cars over the same month last year. On a sequential basis, exports increased 21% in June from 20,125 cars in May.
Maruti's export rose 176% to 13,336 cars last month over 4,836 cars sold overseas in the same month last year. Month-on-month export increased 47% from 9,087 cars in May this year. Three small cars—A-Star, i10 and i20—are the biggest grossers in Europe as these fuel-efficient models emit low volumes of carbon dioxide per kilometer.
Thanks to booming exports, Hyundai's production schedule for exports is already booked for the next two months and the company is now looking at bagging orders for September and beyond, helping the company post handsome profits. This is likely to help the company that recorded a loss of Rs 87 crore in the quarter ended March due to currency fluctuations.
"Exports have jumped as monetary incentives for fuel-efficient and eco-friendly cars low on emission have gone up in Europe. We fit the bill as our new cars i10 and i20 adhere to such standards," Hyundai's senior vice-president (sales & marketing) Arvind Saxena said.
Germany, better known for its luxury marquees BMW, Audi and Mercedes, has set aside €5 billion to make the country ecofriendly by encouraging fuel-efficient cars. Those exchanging big cars for small fuel-efficient ones will get €2,500. Spain will barter two lakh cars by giving €2000 in cash to people exchanging fuel guzzlers.
France offers an incentive of e1000 with deferred tax benefit of up to e5,000 on each car with carbon dioxide emissions less than 160 gm/km. Italy is extending a e3,000 payout for all new cars emitting carbon dioxide below 130 gm/km.