Maruti Suzuki India said the Middle East continues to remain an important export market despite geopolitical disruptions, with the automaker diverting shipments through longer shipping routes that have increased logistics costs while relying on its diversified global export footprint to spread the impact across its wider export business.
Speaking during the company’s June sales briefing, Rahul Bharti, Senior Executive Officer (Corporate Affairs), said exports to the Middle East have continued despite the disruption to traditional shipping routes.
“Middle East continues to be an export destination. It’s not that our exports have become zero in the Middle East. We continue to export, although via a longer route, through the Cape of Good Hope and into the Mediterranean and the Red Sea,” Bharti said.
He acknowledged that the revised shipping route has resulted in higher logistics costs but said the company’s presence across around 100 export markets helps reduce the overall impact on its export business.
“There is certainly a cost increase because of logistics, because you take a much longer route. But that’s a very small portfolio of our total sales. The advantage of being diversified across 100 countries is that whatever increase in cost comes, you can dilute it over a much larger portfolio,” he said.
Asked when Maruti Suzuki expects to return to shorter shipping routes, Bharti said that would depend on how the geopolitical situation evolves.
“The question of shorter routes will come back when the war gets over. If you can give me an answer to that, we can give you an answer on the timing of the shorter routes,” he said.
Despite the longer shipping routes, Maruti Suzuki continued to post strong export growth. The company exported 42,768 vehicles in June, up 13% year on year, while first-quarter exports increased 28.6% to 124,736 units. Bharti said this marked Maruti Suzuki’s highest-ever first-quarter export performance and the second-highest quarterly export volume in the company’s history.
Bharti said the company’s diversified presence across around 100 overseas markets has enabled it to continue serving the Middle East despite longer shipping routes, while spreading the impact of higher logistics costs across its broader export portfolio.