(MENAFN- KNN India)
New Delhi, Jun 17 (KNN) India's exports of three-wheeled vehicles, which have been declining in recent years, show no signs of recovery in the current fiscal year 2024-25.
Key international markets including Sri Lanka, Bangladesh, Nigeria, and Egypt are experiencing subdued demand for these vehicles, industry experts report.
Preliminary data indicates a 11.3 per cent year-over-year plunge in India's three-wheeler exports for the month of May. In the first two months of fiscal 2024-25, major automakers Piaggio and TVS Motor Company witnessed export declines of 16 per cent and 19.9 per cent respectively.
The fall follows a 26 per cent drop in the previous fiscal year 2022-23 and a 17 per cent decrease in 2023-24, according to figures from the Society of Indian Automobile Manufacturers (SIAM).
Anurag Singh, Managing Director, Primus Partners, attributed the slump to severe economic crises afflicting countries like Sri Lanka, Bangladesh, Nigeria, and Egypt, which have significantly dampened their demand for three-wheelers, reported BS.
"These economies are struggling with high inflation, political risks, and uncertainties, contributing to a bleak outlook," Singh explained.
Sanket Kelaskar, Analyst, Ashika Group, cited additional factors such as high inflation, currency devaluation, import restrictions in key African markets, and a shift towards four-wheeled vehicles in some regions as reasons behind India's dwindling three-wheeler exports.
Importantly, Egypt and Somalia have imposed outright bans on three-wheeler imports due to concerns over congestion and safety issues. Some African nations are also prioritising imports of essential goods over vehicles, further compounding the challenges.
While acknowledging the export slowdown, Kinjal Shah, Vice President, ICRA, a credit rating agency, noted that exports have never constituted a major portion of India's overall commercial vehicle sales, including three-wheelers.
However, Shah warned the domestic market is projected to face a slowdown in the current fiscal year, adding to the industry's difficulties.
On the domestic front, India's three-wheeler segment has witnessed a 41 per cent year-over-year growth, buoyed by surging sales of electric three-wheelers.
TVS Motor Company, a leading player, has outlined plans to bolster its domestic presence by launching more electric models across various battery capacities and range options to cater to customer preferences.
Despite the current export woes, industry experts believe India's automakers retain the ability to swiftly meet demand from these markets should economic conditions improve.
"Companies like Bajaj and TVS are well-positioned to capitalise on any potential recovery," Singh noted.
(KNN Bureau)
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