Rising protectionism and shifting geopolitical dynamics are posing serious challenges to commercial vehicle export prospects, asserts Ashish Bhatia. 

As 2024 comes to an end, commercial vehicle exports are facing significant challenges. Strategically navigating these issues is essential for capitalising on global opportunities. The export aspirations remain intact; however, the bizarre circumstances the industry has dealt with see no end. From war-torn scenarios refusing to cool down to changing governments, the threat of high retaliatory tariffs have raised the entry barriers. This is against the backdrop of higher regulatory compliances having pushed up costs the world over.

India continues to watch the developments closely. The focus remains on long-term efforts to reduce logistics costs in a bid to introduce new efficiencies and ease margin pressures. At the Original Equipment Manufacturer (OEM) level, the changes are taking shape in the supply chain with tier suppliers working even more closely on manufacturing needs with the OEMs. The changes are also reflecting on the shopfloor with sophisticated tooling setups put in place to ensure higher output at globally acceptable quality.  

A snapshot of exports in 2024

In FY25 thus far, as per SIAM statistics, overall automotive exports rose by 14 per cent in H1-FY24. Despite previous fiscal challenges like currency devaluations, markets like Latin America and Africa are known to have rebounded. Here, the commercial vehicle exports also saw a 12 per cent increase, totalling 35,731 units during April-September, 2024 as per Shailesh Chandra, President of SIAM.

The three-wheeler segment registered a one per cent decline, with 153,199 units exported during April-September compared to 155,154 units in the corresponding period last year. Led by passenger carriers, the three-wheeler segment, in November, accounted for the export of 23,439 units degrowing by (-) 10.4 per cent over the same period last year (November 2023). In the period April-November, FY2024, 203,436 units were exported registering (-) 1.6 per cent de growth over the same period last year. The segment was led by Bajaj Auto with 1,20,537 units exported (Between April and November 2024). TVS Motor Company Ltd. was a distant second at 70,888 units. The gap was further stretched with Piaggio Vehicles Pvt. Ltd. ranked third with 8,663 units. Mahindra & Mahindra sold 34 units in the e-rickshaw segment in the same period. In the quadricycle segment, Bajaj Auto as the sole player exported 4,598 units, a marked improvement over the previous year when it exported 2,378 units.  

In the van segment, 581 vans were exported in November 2024 compared to 459 units in November 2023. Between April and November FY2024, 5,529 vans were sold against 5,343 units the year-ago (Between April and November FY2023). Maruti Suzuki India Ltd. held its lead with 5303 units, significantly ahead of Mahindra & Mahindra and Tata Motors Ltd. who ranked second and third respectively. 

LCV and M&HCVs

Looking at the pure-play CV OEMs, between July and September 2024, cumulative exports of LCVs and M&HCVs grew by 16 per cent at 19,990 units against 17,239 units. M&HCVs registered a 15.2 per cent growth with 5,360 units exported against 4,652 units in the same period the previous year (July and September 2023). Here passenger carriers registered a (-) 2.4 per cent dip while goods carriers grew handsomely by 36.1 per cent. In the case of LCVs, the exports grew by 16.2 per cent with 14,630 units against 12,587 units. 

For the period, of April-September 2024, M&HCV exports grew by 13.5 per cent with 9,576 units against 8,440 units in the same period a year earlier. Passenger carriers de grew by (-) 9.4 per cent with 4,444 units while goods carriers grew by 45.3 per cent at 5,132 units. In the same period, LCV exports grew by 11.7 per cent with 26,155 units. Passenger carriers registered a 65 per cent growth with 2,106 units while goods carriers registered a 8.6 per cent growth with 24,049 units. 

In passenger carriers, Ashok Leyland led with 3,011 units a de growth compared to 3,186 units the previous year. Tata Motors followed at 878 units in turn followed by VE Commercial Vehicles (VECV) at 534 units. In the goods carrier segment, Tata Motors led with 2,808 units against 1,801 units the year ago. Ashok Leyland fought for the second spot to emerge victorious with 1,155 units followed closely by VECV at 1,087 units. In the LCV passenger carrier segment, Tata Motors extended the lead with 1,234 units against 855 units a year ago. Ashok Leyland was a distant second with 396 units and Force Motors ranked third with 267 units. In the goods carrier segment, Isuzu Motors India extended its growth with 9,745 units. Mahindra & Mahindra followed at 8,449 units. Tata Motors Ltd. witnessed a de growth at 2,913 units compared to 4,573 units the year before. 

Tata Motors exported 7,833 units compared to 8,393 units. Ashok Leyland exported 5,644 against 5,123 units. VE Commercial Vehicles exported 2,322 units against 1,764 units. 

Exports FOR FY15-24

The export volume of commercial vehicles from India between the financial years 2015 and 2024 can be traced back to 86.94k in FY2015 known to have peaked at 108.27k in FY2017. However, after a minor decline in FY2018 (96.87k), exports fluctuated, with a sharp dip in FY2020 (60.38k) and FY 2021 reaching the lowest point at 50.33k, attributed to disruptions from the COVID-19 pandemic. A significant recovery occurred in FY2022, with exports rebounding to 92.3k, before declining again to 78.65k in FY 2023. Exports further dropped to 65.82k in FY 2024. The volatility in India’s commercial vehicle exports over the last decade is evident, with recent years showing signs of recovery but not yet reaching pre-pandemic highs giving a headroom for a turnaround in the coming years.