Auto firms worried over Egypt crisis; Exports hit
The political crisis in Egypt has raised worries for the Indian auto companies . Egypt, one of the largest market in West Asia for Indian automakers, has been hit as the full-blown political crisis has dried the market temporarily for Maruti, Hyundai Motor ,Bajaj Auto and other major players, affecting their export orders. Maruti Suzuki has said that its exports to Egypt, which accounts for 3% of its overseas sales, would be directly impacted by the political unrest.
It sells popular compact car Alto and Maruti 800 in Egypt. Although it has no direct operations in the country, its single distributor that is responsible for sales, lies closed for the time being. Maruti exported around 4,000 cars to Egypt in the last fiscal. “It is one of the most important market in West Asia where demand for our older models like Alto has been strong for years.
We are closely monitoring the current political crisis as there has been no sales at our distribution network in Cairo in the past 25 days of protests," Maruti’s managing executive officer (marketing & sales), Mayank Pareek said. Indian carmakers are already facing tough times as sales in Europe, the single largest export market have been declining for the past one year. Overall exports declined 2% to 3.21 lakh cars for the first nine months of the fiscal . For Maruti, exports declined by 3% in the April-January period to 1.16 lakh units from 1.20 lakh units in the same period last fiscal.
Major car exporters like Maruti Suzuki and Hyundai have been looking at developing alternate markets in Australia, Vietnam, Malaysia , and Latin America as orders from Europe have been shrinking. Country’s largest exporter, Hyundai Motor India, which posted a sharp 18% fall in exports in first nine months of the fiscal is also facing sale constrains as its single distributor has also shut operations, where it sells around 4-5 ,000 cars per year. “With the current uncertainty , there has been no sales in past few days. If it continues the export would be impacted in near future,” the Hyundai spokesman said.
Bajaj Auto, which dominates the threewheelers market views it as a temporary disturbance . “Exports will continue as scheduled ,” said Rakesh Sharma, president (international operations) Bajaj Auto. The company exports substantial volumes of two and three-wheelers to Egypt, but refused to divulge the quantum of exports. The unrest in Egypt has forced many Indian firms, which operate in other sectors to close operations temporarily. FMCG firms Dabur and Marico and paints manufacturing company Asian Paints have shut their plants in the country.