India's largest auto export market is no longer Africa. Export data shows that Latin America has overtaken Africa, and 25% of vehicles exported in 2015 went to Latin America compared to 21 % in the year 2014. And for the first time in a decade, exports to Africa witnessed a downfall.
Exports to Latin America has cost $2.26 billion which is an increase of nearly 19% in logistics cost compared to 2015. The logistic costs are huge as Latin America is some 15,000 km away from India.
But, government incentives under the 'Make in India' campaign and highly cost efficient manufacturing capabilities are playing a significant role in offsetting some of the impacts.
The overall exports were led by Volkswagen (now that's a huge surprise!). Even though the company was involved in an emission scandal, the European automaker shipped out 70,000-odd vehicles, out of which 63,000 mostly the Polo and Vento was shipped to Latin America.
Concerning this, Lauermann of Volkswagen explained: "Mexico offers exemption of duties on imported cars for a number equivalent to 10% of the total production of cars done by the brand in Mexico. So, number of cars up to 10% of Volkswagen production in Mexico can be imported by Volkswagen into Mexico, without having to pay import duties on it. Add to that the good cost and quality position of our manufacturing in India, and it forms a good business case."