India becomes world’s third largest auto market
January 10, 2023
India has reportedly became the world’s third-largest automotive market for the first time. With vehicle sales totalling approximately 4.25 million units during 2022, the region has now overtaken Japan and sits behind the USA (second) and China (first).
From January-November, the Society of Indian Automobile Manufacturers (SIAM) reported that new vehicles totalled 4.13 million. Adding December’s sales volume reported by Indian carmaker Maruti Suzuki brought the total to the noted 4.25 million. According to Nikkei Asia, India’s vehicle sales volume is expected to rise more, pending Q4 commercial sales figures and year-end results from other automakers.
India’s auto market has fluctuated in recent years; roughly 4.4 million vehicles were sold in 2018, but this volume dropped below 4 million units in 2019. When the COVID pandemic triggered lockdowns in 2020, vehicle sales dropped again to below 3 million units. While sales began to recover in 2021, the chip shortage meant numbers didn’t reach 4 million units. A recovery from this shortage is said to have enabled the recovery in 2022, though electric-only vehicles only play a small part in Indian vehicle sales.
Currently, India is home to approximately 1.4 billion and is anticipated to meet and surpass China’s population this year. In 2021, according to Euromonitor, only 8.5% of Indian households owned a passenger vehicles, however there is extensive room for sales growth. The government has also begun to offer subsidies for electric vehicles amid petroleum trade deficits.
In Japan, approximately 4.2 million vehicles were sold last year, down 5.6% from 2021, according to data from the Japan Automobile Dealers Association and the Japan Light Motor Vehicle and Motorcycle Association. Japan’s auto sales peaked in 1990 at 7.77 million units; the country’s declining population offers little prospect for a significant recovery in sales in the foreseeable future.
China surged past Japan to become the second-largest auto market in 2006. In 2009, China overtook the US. to become the world’s largest market.