All hell seems to have broken loose on the streets of the ancient civilization of Egypt. With protestors against the regime taking to the streets for almost the entire week, the turmoil in the geo-politically sensitive country is sending shock waves across the world. One such shock wave was directed at the Indian automobile sector. According to MSI (Maruti Suzuki India ltd) three percent of its exports were dependent on Egypt, which due to the political upheaval has been thrown off-guard. The latest round of protest across the Arab world has got many pundits thinking overtime, with regards to the greatest exports from that part of the world. You got that correct we are talking about crude oil, the backbone of any economy. Almost all car makers in India have raised the cost of their products citing rise in commodities prices, chief amongst them is the phenomenal rise in the fuel prices, which saw an increase twice in a single month alone. This is sure to have an over-spill effect on all the finished products across the aisle. Coming back to India, Mr. Mayank Pareek Executive officer for Sales and Marketing at MSI was quoted as saying that the North African country of Egypt accounted for a total of 3 percent in the overseas export of the company. He was rightly worried for the future exports to the country, in view of the latest developments and reports, of breakdown of the law and order situation, culminating out of the country. The report in the media mentioned that Maruti Suzuki India ltd exported a total of 1, 47,000 units in the last fiscal. Egypt has been a great hunting ground for the company’s small car, the Maruti Alto. The scope of operation in Egypt was restricted to only one single dealership, with no direct operations involved whatsoever.
Well all that is meeting the eye is not true, as it may look obvious that the unrest in Egypt are pushing Maruti’s export southwards, which may have a grain of truth in it but the main culprit is the declining demand in the European markets. Europe being a major export destination for Maruti, any decline in the demand from that quarter is sure to impact Maruti’s exports operations. The exports have seen a declining trend with a decrease in exports last year to the tune of 36 percent, which by any standards is crippling. Even the current fiscal has not brought in merry news for the company, with a report revealing that the exports for the period April-January has taken a rain check by at least 2.9 percent over the same period last year.