Increasing fuel costs, inflation and interest rates are coercing auto manufacturers abroad to diverge from big cars to much smaller makes. This is offering gigantic business openings for auto makers in India such as Maruti Suzuki and Hyundai.

According to some of the sources, “Car makers in markets like Latin America and Europe have ramped up sourcing orders of small cars from Indian companies, as surging fuel costs and recessionary trends take a toll on existing makes.

Some of the auto companies like Nissan is looking forward to buy 50,000 Maruti Suzuki A-Star compact cars from its competitor Maruti Suzuki and export to markets in Europe. Even Tata Motors is in discussion with the foreign dealers in the western markets to launch its ultra-cheap Nano. This car will come with additional features such as airbags, better interiors and engine options in the overseas markets.

The foreign car makers desire to obtain cars from India because the operations are completely-owned Indian auto makers when compared to China.

According to Hyundai Motor India senior V-P Arvind Saxena, “Currently, India is a small car hub for Hyundai and we have a backlog of export orders too.”

However Hyundai exports 40% of its small car manufactures, mainly Hyundai i10 and Hyundai Santro which is sold in 97 countries worldwide. The company may divert its small cars to western markets due to the slow domestic market. Maruti Suzuki, country’s major auto maker is presently exporting Alto, M800, Omni, Wagon R and Zen Estilo to non-European markets such as Chile, UAE, Algeria and East Africa.

A company official of Maruti Suzuki said that, we had stopped exports to Europe and now we intend to start exporting the A-Star compact car to Europe by year-end.