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Two-wheelers' export volumes to see sustained growth in 2HFY21: Ind-Ra
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SME Times News Bureau | 24 Nov, 2020
India's two-wheelers' (2Ws) export volumes will see a sustained growth
in the second half of FY21-FY22, expects India Ratings and Research
(Ind-Ra).
According to the ratings agency, the industry faced
temporary hiccups in 1QFY21 (first quarter of Financial Year 2021) due
to the spread of Covid-19 pandemic and weakened crude oil prices,
hurting the economies of key exporting destinations for India.
"This
coupled with the nationwide lockdown, supply-chain and logistics
disruptions impacted export sales significantly," said the agency in a
report.
"Since then India's 2W exports have moved in line with
growth in domestic markets, with September and October 2020 recording
the highest monthly sales in FY20-October FY21."
Accordingly,
Ind-Ra expects the exports momentum to continue in the remaining part of
FY21 and FY22 primarily driven by the exporting countries' lower
penetration level, demand for usage as commercial fleet, stability in
crude prices, lack of public infrastructure and aversion to public
transport amid Covid-19.
"Moreover with their strong market
position and robust distribution network, Indian Original Equipment
Manufacturers (OEMs) will continue to gain traction for their key
offerings," the agency said.
"Ind-Ra expects the 2W export decline for FY-21 to be in line with that for the domestic industry at 18-21 per cent."
The
ratings agency said since 2W exports only accounted for 16-18 per cent
of the overall 2W sales for Indian OEMs, this is not likely to be
substantial enough to compensate for the domestic volumes during the
same period.
"2W exports volumes are likely to increase by mid-teen in FY22," India-Ra added.
As
per the report, 2W export sales volumes declined by 29 per cent YoY
during April-October 2020, which was lower than the overall auto export
sales (excluding CV) decline of 33 per cent during the same period.
"The
monthly sales volume recorded during September-October 2020 was the
highest among the past two fiscals. This is primarily backed by a
gradual recovery seen in key markets, and stable crude oil and forex
prices," the report said.
"Most of the key exporting markets in
Latin America, Africa and Asia have recovered to 80-90 per cent of
pre-Covid export levels."
Besides, the report cited that 2W
exports grew at a CAGR of 9.7 per cent during FY11-FY20 compared to 4.5
per cent growth in the domestic markets as major OEMs started looking at
export markets to diversify their presence to mitigate intensified
competition in the domestic markets.
Even in FY20 exports grew at 7 per cent compared to domestic 2W sales volume decline of 18 per cent.
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Customs Exchange Rates |
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