ABSTRACT
Chapter 7 investigates the impact of foreign entry on trade performance in India’s passenger car industry from 2000–01 to 2013–14. In general, exports of the industry have recorded an improvement after 2000. But this improvement is not visible in the case of all the selected firms. Except Hyundai, all other firms remained net importers until recently. The situation has become more worrisome as the only net exporter, Hyundai, has shifted the export base of some of its models from India to Europe, which has led to a sharp reduction in exports of the firm after 2014. The empirical analysis is further extended by analysing the trade performance of the car industry by taking the sub-segments as the unit of analysis. Around 95 per cent of the exports comprise compact and mid-sized cars whereas those of executive, premier and luxury segments remained nil throughout the reference period. The declining exports of Hyundai, thus raises a serious concern about the sustainability of exports of the car industry, as this firm accounted for 51 per cent of the compact segment and 32 per cent of the mid-sized car segment exports from the country in 2012–13.
