Screening of small car exports resulted with scrappage policy in Europe. This has strongly hit the two giants Maruti and Hyundai Motor in India. These two companies were fortunate to have a hike in sales (35-40%) over the last few months due to the incentives disbursed by Germany, France, and the UK. Under this scheme, the old cars were replaced with the new ones in fuel-efficient ranges. By this December the scrappage scheme would come to the curtains in Germany and Austria, followed by other countries. By seeking the grace of the European program extension, the companies are anticipating some good business from non-European countries. Till a week ago, Maruti Suzuki’s export figure was 58,500 units of which A-Star accounted 33,500 units, Nissan exported its 25000 units of Pixo along with other models numbering 7900 units. Maruti Suzuki, however, set a target of 1.3 lakhs for this year in terms of 70,023 units last year. The major hiccup for the European market, the scrappage scheme may end anytime paving revival of European market, hope the companies. Field experts see that Maruti is not in a position to export beyond 1.16 lakh units this year, as from the exported units, 90000 units come under Europe while the remaining 30000 units in non-European market.
Hyundai faced a smiling gesture from the European market, as it could export more than 50% of its units to Europe of which Germany alone is the major sharer. Hyundai targets to export 2.7 lakh units in this year against the last year’s 2.45 units. The company is too happy with the advance orders for the export, in spite of decline. Hyundai exports i10, and i20 for Europe. The scrappage scheme insists cars to have an emission level below 160 g /km. Germany is too persistent in this regard as it has allocated e5 billion for this scheme with an incentive of e-2500 for fuel-efficient new car. For its part France has allocated 220 million euros from which 1000 euros and a tax benefit upto 5000 euros for a new car.
It was the UK which created a fund allocation with 300-million pounds corpus under cash-for-clunkers scheme by which the customer would get 2000 pounds for a new car. The funding is expanded with additional 100 pounds. Such scheme is there in practice in other countries like Spain, Italy, Austria and the Netherlands.