Report: India surpasses Japan to become the third-largest auto market in the world

According to the most recent industry data, India outsold Japan in terms of auto sales last year, making it the third-largest auto market for the first time, Nikkei Asia reported on Friday.

Preliminary data indicates that India sold at least 4.25 million new vehicles, surpassing Japan's 4.2 million sales.

Between January and November 2022, 4.13 million new cars were delivered in India, according to the Society of Indian Automobile Manufacturers. The amount is increased to almost 4.25 million units by including the December sales volume that Maruti Suzuki, the largest automaker in India, disclosed on Sunday.

Nikkei Asia reports that the inclusion of upcoming commercial vehicle sales data for the fourth quarter and the year-end numbers from Tata Motors and other manufacturers will likely result in an increase in India's sales volume.

With 26.27 million automobiles sold, China maintained its dominance in the world auto market in 2021. With 15.4 million automobiles, the US stayed in second place, and Japan came in third with 4.44 million.

India's auto sector has experienced fluctuations recently, according to Nikkei Asia. In 2019, volume fell to below 4 million units, partly as a result of the credit crunch that impacted the nonbank sector that year. In 2018, almost 4.4 million automobiles were sold.

Vehicle sales fell even lower than the 3 million-unit threshold in 2020 when the Covid epidemic prompted a nationwide lockdown. Sales bounced back in 2021 to close in on 4 million units, but growth was hampered by the lack of automotive chips.

According to Nikkei Asia, most of the new automobiles sold in India last year were gasoline-powered, including hybrid vehicles, with electric vehicles hardly making an appearance. Automobiles for the Indian market are thought to have fewer chips than those marketed in Western economies.

Nikkei Asia asserts that the relief from the automotive chip crisis in 2022 served as a launchpad for a rebound. Tata Motors and other Indian automakers witnessed an increase in sales last year, joining Maruti Suzuki.

There are 1.4 billion people living in India, and it is anticipated that this year or in the early 2060s, its population would surpass that of China. Incomes are also increasing.

According to British research company Euromonitor, only 8.5% of Indian households possessed a passenger vehicle in 2021, leaving lots of space for sales development. In response to a trade deficit brought on by imports of petroleum, the government has begun providing subsidies for EVs.

Data from the Japan Automobile Dealers Association and the Japan Light Motor Vehicle and Motorcycle Association show that 4,201,321 automobiles were sold in Japan last year, a 5.6% decrease from 2021.

According to Nikkei Asia, the omicron pandemic and the lockdowns in China significantly reduced production, preventing manufacturers from meeting demand.

Nikkei Asia reports that Japan's auto sales, which peaked in 1990 at 7.77 million units, have fallen by nearly half from their peak. Additionally, there is little chance that sales would significantly rebound in the near future due to the nation's dwindling population.

China surpassed Japan in 2006 to overtake it as the world's second-largest auto market, according to Nikkei Asia. China surpassed the US to become the largest market in the world in 2009.