India's auto exports plunge 28 percent in Q1FY24 as monetary crisis hits Africa, other developing nations

The monetary crisis in Africa and other developing nations had a negative impact on India's exports of automobiles, which fell 28 percent in the April-June quarter of FY24. Overall exports stood at 10.3 lakh units in the first quarter ended June 30, down from 14.2 lakh units in the same period last year.

As per SIAM DG Rajesh Menon, all vehicle segments have seen a drop in exports in the first quarter, as there has been a devaluation of currencies in many destinations of exports, especially in Africa and other developing countries. “These countries have been facing challenges of availability of foreign exchange, which is limiting the sales of vehicles, and countries are focusing more on imports of essential items, though the demand for vehicles from consumers exists in these markets," he told the news agency PTI.

The main reason for the decline was two-wheeler exports. From April to June, two-wheeled vehicle exports fell by 31 percent, from 11,48,594 to 7,91,316 units.

In the same way, shipments of commercial vehicles dropped to 14,625 units in the first quarter, which is 25 percent less than the 19,624 units shipped from April to June of the fiscal year 2022–23. Three-wheeler exports also went down by 25 percent, from 97,237 units in the June quarter of the previous fiscal year to 73,360 units in the period under review.

Further, even the total passenger vehicle shipments totalled 1,52,156 units, a five percent decrease from the 1,60,116 units shipped during the April–June 2022 period. Shipments of passenger cars decreased from 1,04,400 units in the corresponding period last year to 94,793 units in the current period. Utility vehicle shipments also slightly decreased, from 55,547 units in the same period last year to 55,419 units in the first quarter of this fiscal year.

The passenger vehicle segment witnessed a close to 15 percent drop in FY23 after a 36 percent jump in FY22. The strong export growth in FY22 was attributed to the lower base in FY21 and manufacturers tapping the export market to enjoy the benefits of a strong dollar. In value terms, vehicle and component exports stood at US$ 23 billion as of FY22, representing five percent of the total merchandise exports.

As per the government data, major export destinations of Indian automobiles include- the US, South Africa, Mexico, Bangladesh, the UAE, Saudi Arabia, Turkey, Colombia, Brazil, Nigeria, Nepal, Indonesia and the Philippines. According to the Ministry of Commerce and Industry’s statistics, the US is a major export partner with close to US$ 3 billion in exports as of FY22, followed by Mexico (US$ 1.53 billion) and South Africa (US$ 1.21 billion). Two-wheelers account for the biggest share in exports, with key export destinations being Nigeria, Nepal, Colombia, Bangladesh, Austria, Mexico, Kenya, the Philippines and Uganda.