Auto exports growth to continue in FY19: India Ratings
India Ratings and Research (Ind-Ra) expects the automobile export volume growth momentum to continue in FY19, but at a slower pace than in FY18. The rating agency expects high single-digit growth in overall exports in FY19. Automobile exports from India revived in FY18, after experiencing a subdued growth for two years due to weak economies and currencies in African and Latin America (LATAM) countries. With the stabilisation of commodity prices, these regions have witnessed economic stability, inducing demand for two wheelers in particular.
Exports of vehicles from India recovered in FY18, post a decline in FY17 and slow growth in FY16. Export volumes of all vehicles combined grew 16.1 per cent yoy in FY18, compared to a 4.5 per cent yoy fall in FY17. The growth was largely driven by two and three-wheelers sales (largest contributor to export volumes) which grew at a robust 33.6 per cent yoy in FY18, driven by stabilisation of developing countries in Africa and LATAM. However, PV exports volume declined 1.7 per cent yoy during the same period, as passenger cars volumes declined and UV volumes slowed, post rising significantly in the past five years.