Mexico is expected to overtake South Africa as the leading export market for cars made in India. Last fiscal saw exports to Mexico increase to the tune of 82,000 units while the current fiscal will see exports have increased by 50%, to approximately 1.3 lakh units.
Despite Mexico being a left hand drive market, leading automakers in India have noted increased demand for their models. Volkswagen expects to export over 55,000 units while Volkswagen Vento was an instant hit in the country when it replaced Jetta Classico. General Motors India exports should reach 45,000 units with its Beat hatchback, which is the most in demand in Mexico (where it is sold as Spark). Hyundai Motors will also be exporting its i10, Grand i10 and Xcent while Ford Figo and Figo Aspire will be making its way to Mexico markets along with the Maruti Suzuki Ciaz.Within 2 years of starting exports to Mexico, Volkswagen India exported 100,000th car to Mexico this week.
Mexico is one of the farthest export market Indian car makers export vehicles to. In spite of this, plus time delay, freight costs and import duty of 20%, Indian cars are very successful in Mexico. Automakers such as Volkswagen and General Motors India are allocating larger batches of cars to be exported to Mexico so as to take advantage of economies of scale and other cost benefits.
Other automakers also making a beeline for increased exports to Mexico include Hyundai Motors India which will be increasing exports to the extent of 37% in the current year when it expects to ship over 12,500 units. However, the fact that Mexico’s currency is weakening makes imports more expensive. The Mexican Peso has increased to 16.26 against the US dollar today from 12.65 in 2012, making India made cars more affordable as compared to those made in the US.