Indian car makers Maruti Suzuki and Hyundai Motors are having a real hard time with their exports as European countries and the UK had introduced scrappage scheme in past few months has decided to lapse the scheme by the year-end.

The car makers had earned a huge amount of profit in last few months as their exports was increased by 35-40% due to the incentives offered by the Germany, France and the UK to help owners of older cars and vans buy new fuel-efficient vehicles.

The government offered incentives to the customers of these countries for exchanging their old gas-guzzling big cars and opt for more fuel efficient small cars.

By this December the scrappage scheme would come to the curtains in Germany and Austria, followed by other countries. By seeking the grace of the European program extension, the companies are anticipating some good business from non-European countries. Company official says, “While we are hoping the European countries will announce new schemes to encourage small car exports or the existing schemes in some countries get a further extension, we are simultaneously working with non-European countries too”.

Maruti Suzuki has exported over 58 500 units and has export target of 1.3 lakh units in 2009-10 against 70,023 units in the last fiscal year. Hyundai Motor India (HMIL), the country’s largest car exporter is also benefited from this and has got additional export orders and aims to export about 2.7 lakh units in 2009-10 against 2.45 lakh units last year.

Therefore, this decision of Government has already affected the sales rate and will effect more which will effect the export orders as well.

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Posted by Naresh Koshti on 9 October, 2009 10:40:25 AM IST #