The world’s two largest car manufacturing companies are betting big on increasing sales in India amid global geopolitical uncertainties. Japanese automaker Suzuki Motor Corp recently raised its production forecast for the current financial year to 3.52 million units, expected to boost sales in India, its biggest market, following the GST rate change last September.
South Korea’s Hyundai Motor estimates that its sales growth in the Indian subcontinent will be the fastest in the world in 2026. These Asian automakers, as well as their European competitors like Renault and Volkswagen Group, are excited about the opportunities in India, as it is now the world’s third-largest market with huge scope for growth, and is also a manufacturing hub for exports. Let us also tell you what kind of estimates have been made by the companies.
Hyundai is also seeing growth
Hyundai, which expects global sales to grow a modest 0.5 per cent to 4.16 million units this calendar year, estimates India growth of 3.1 per cent. In a recent presentation to investors, it estimated sales growth to be 0.5 percent in the US, 1.8 percent in Korea and flat in Europe. For Hyundai, after the US and Europe, India is the third largest market outside its home base, accounting for about 14 per cent of international sales. Hyundai Motor India’s sales in January were the highest on record.
Managing Director Tarun Garg said in a recent conversation that if January is any indication, I think we are in for a very strong run. Citing growing experts as well as strong local demand from both urban and rural markets, he said many companies are reporting strong growth. We are seeing such positive momentum after a long time.
What is Suzuki planning?
Of the 67,000-unit additional production that Suzuki estimates for the quarter, 92.5 per cent is in Asia, where Indian subsidiary Maruti Suzuki runs four factories with a total annual capacity of 2.6 million units. This country accounts for 56 percent of Suzuki’s global sales and about 65% of its production. Partho Banerjee, Senior Executive Officer (Marketing and Sales), Indian market leader Maruti Suzuki, said that after the GST cut, sales of all the models in our portfolio have increased.
He said that the demand is so high that the company’s production teams are working overtime. In January alone, we ran our plants on two Sundays and also on the Vasant Panchami holiday. Banerjee said car loans became cheaper due to the rate cut by the Reserve Bank of India, and the income tax reset announced in the budget last year is also increasing the demand.
In the first nine months of this financial year, Suzuki’s sales in India increased by 3.8 percent to 1.35 million units, while in Europe it declined by 18 percent to 135,000 units. Sales in Asia, except India and AMEO/LatAm (Africa, Middle East Oceania and Latin America), grew rapidly, but on a low base. Apart from India and Japan, Suzuki also has facilities in Asia in Thailand, which it agreed to sell to Ford and Vietnam in January.
Estimates of other foreign companies
Among other foreign automakers, Renault, which bought 51 per cent stake in an India manufacturing unit from alliance partner Nissan, said India is a “key pillar” of its global growth plans. CEO Fabrice Cambolive recently said in an ET report that the company expects 50 percent of its growth in the next three years to come from the markets of India and Brazil. Camboliv said that the company is planning to launch several new products, including several SUVs, to increase its sales share in the Indian market to 3-5 percent by the end of this decade.