Car exports from India to other South Asian countries like Nepal, Bhutan, Sri Lanka and Bangladesh have been hit as a result of the political instability and slow economic growth in these countries. Another reason for dwindling car exports is that a number of these nations are flooded with cheap used cars.

Indian car maker, Mahindra & Mahindra, which ordinarily exports 3000 vehicles to South Asian markets has seen a reduction in export numbers owing to the global economic crisis, especially in Sri Lanka. The political instability in the country has also affected auto sales.

However, there are also those who think the scenario is changing for the better. Honda Siel's Vice President (Marketing), Jnaneswar Sen, said that with the civil war over in Sri Lanka, things are looking up for the auto industry in the country. Sen's optimistic statement came in spite of the fact that Honda Siel sold 68 cars in South Asia last year and saw a drastic fall in exports this year.