Impact of Red Sea crisis on Indian automobile sector, increase in cost of Maruti cars
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Country’s leading car company Maruti Suzuki India (MSI) may see a slight increase in costs due to changes in shipping routes due to the Red Sea crisis. A senior official of the company gave this information. This leading company in the automobile sector exported approximately 2.7 lakh vehicles in the last calendar year. However, the company said that they do not think the issue will have any significant impact on their exports.
Challenges faced due to Red Sea issue
MSI Executive Officer (Corporate Affairs) Rahul Bharti said, “We are facing some logistical challenges due to the Red Sea issue. The cost may increase slightly due to risks and vehicle changes, he said, adding that there may be some changes during export of products. This may result in some uncertainty in the arrival of ships and lifting of vehicles for export.
About 80 percent of India’s trade with Europe passes through this route.
Bharti says that this is a small issue, but it is a common issue in the export business. The Red Sea Strait is important for 30 percent of global container traffic and 12 percent of global trade. About 80 percent of India’s trade with Europe takes place through this route.
Maruti Suzuki aims to export at least 7.5 lakh vehicles by the end of this decade
Bharti said that Maruti Suzuki aims to export at least 7.5 lakh vehicles by the end of this decade. He said Africa is becoming a good market and the West Asia region has performed very well recently for several reasons. Bharti said that the government is signing some free trade agreements (FTAs) so that the company can get some relief on tariffs. He said that Maruti is preparing to start production of battery electric vehicles (BEV) this year. The first such model will be a medium-sized SUV. This model will meet the needs of the domestic market. Apart from this, it will also be exported to Japan and Europe.
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