India Tops Japan to become World’s 3rd Largest Auto Market
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The year 2022 saw India selling
4.25 million units of new vehicles, preliminary results show, while more than 4.2
million units were sold in Japan.
·
Easing of chip shortage helped
top auto companies in India like Maruti and Tata Motors record a boost in sales
in 2022.
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Despite a pick-up in pace for
EV adoption, India is still a nascent market for EVs and most vehicles are powered
by gasoline.
India
surpassed Japan in new auto sales in 2022, making it the third-largest market for
the first time, Nikkei Asia reported. The year 2022 saw India selling 4.25 million
units of new vehicles, preliminary results show, while more than 4.2 million units
were sold in Japan.
"New
vehicles delivered in India totalled 4.13 million between
January and November 2022, according to the Society of Indian Automobile Manufacturers.
Adding December's sales volume reported by Maruti Suzuki, India's largest carmaker,
brings the total to roughly 4.25 million units."
India's
overall auto sale volume is higher than 4.25 million units because the recently
released vehicle retail data for December 2022 by FADA(Federation
of Automobile Dealers Associations of India) shows 16.2 lakh units were sold in
December month.
China's
auto market topped the chart in the year 2021 as 26.27 vehicles were sold in the
year, followed by the US at 15.4 million and Japan at 4.44 million. India, which
was on the fourth place, sold around 4 million units in the year amid the global
chip shortage issue.
The
auto market in India has seen a lot of fluctuation in the recent past. The data
shows that roughly 4.4 million vehicles were sold in the country in 2018, and the
number fell below 4 million units in 2019 amid the NBFC crisis that year. The following
year (2020) saw the Covid pandemic hit the country hard and the overall sales dropped
below 3 million units.
As
per Sunjay Kapur, President,
ACMA, despite the challenges, the Indian auto component industry witnessed a rapid
growth of 23%, as the turnover of the industry contributed 2.3% of India's GDP at
₹4.20 lakh crore.
He
attributed factors such as strong and diversified demand, skilled workforce, and
precision engineering to the expansion of the Indian automotive industry. Also,
as per an ACMA-McKinsey report, by 2030 the contribution of EVs in new two-wheeler
and three-wheeler vehicle sales will rise to 50% and 70%, respectively.
Moreover,
the Centre's Production Linked Incentive (PLI) programme
for the automobile sector (with a $3.5 billion budget) offers financial incentives
of up to 18% to stimulate local production of future technology-related automotive
components. The government has also implemented Faster Adoption and Manufacturing
of Hybrid & Electric Vehicles in India (FAME) to encourage the adoption of EVs
through subsidies. Currently, phase II of the scheme is under effect for 5 years
starting from 2019, with a total budget of ₹10,000 crore.
Notably,
only 8.5% of Indian households own a passenger vehicle in 2021, data by a UK-based research firm Euromonitor shows, adding that there's
immense room for higher sales in the country.