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Indian car makers are facing a decline of sale in the South Asian market. According to industry representatives , the causes hitting the sale of Indian cars include slow economic growth , political instability and increased sale of used cars in the South Asian countries like Nepal , Sri Lanka , Bangladesh and Bhutan. According to them , growth in exports to these countries is “much lower than actual potential.”

Indian car makers are major players in the South Asian market. Tata Motors is the market leader in commercial vehicles in the market , which is characterized by marginal volumes.

The global economic slowdown has hampered the growth of Mahindra & Mahindra (M&M) in Sri Lanka. The company sells around 3 , 000 vehicles annually in the South Asian markets. According to P.N. Shah , Executive Vice-President , International Operations , M&M , “The challenge in these countries has largely to do with politics and economics. While political instability has impacted business , in Sri Lanka and Bangladesh , the policy of allowing used cars is a hindrance to new vehicle sales from India. A higher tariff structure , especially for passenger vehicles , is another bottleneck.”

However , some players like Fiat India are bullish about the South Asian car market. The company is planning to export cars to Nepal , Sri Lanka and Bhutan. According to Mr Rajeev Kapoor , Chief Executive Officer , Fiat India , “Due to the high appreciation of the yen and the dollar , these imports have become very expensive. Cars from India are cheaper due to the rupee trade with Nepal and Bhutan. The exchange rate does not fluctuate and this is an advantage.”

Honda Siel Cars India is also optimistic about the South Asian market. According to Mr Jnaneswar Sen , Vice-President , Marketing , HSCI , “Now that the civil war in Sri Lanka is over , the country holds some promise. The same is the case with Bangladesh and Nepal where things are looking up.”

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