India beats Japan, becomes world's third largest auto market: Report
India eclipsed Japan in auto sales last year, according to the latest industry data, making it the third-largest auto market for the first time, Nikkei Asia reported on Friday.
India's sales of new vehicles totalled at least 4.25 million units, based on preliminary results, topping the 4.2 million 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 on Sunday by Maruti Suzuki, India's largest carmaker, brings the total to roughly 4.25 million units.
India's sales volume is expected to rise further with the inclusion of pending fourth-quarter sales figures for commercial vehicles, along with year-end results yet to be released by Tata Motors and other automakers, according to Nikkei Asia.
In 2021, China continued to lead the global auto market, with 26.27 million vehicles sold. The US remained second at 15.4 million vehicles, followed by Japan at 4.44 million units.
Nikkei Asia said India's auto market has fluctuated in recent years. Roughly 4.4 million vehicles were sold in 2018, but volume dipped below 4 million units in 2019, due primarily to the credit crunch that hit the nonbank sector that year.
When the Covid pandemic triggered a countrywide lockdown in 2020, vehicle sales plummeted further below the 3 million-unit mark. Sales recovered in 2021 to approach 4 million units, but the shortage of automotive chips weighed on growth.
Vehicles powered by gasoline, including hybrid vehicles, accounted for most of the new autos sold in India last year, Nikkei Asia said, adding that electric vehicles hardly have a presence. Autos for the Indian market are seen having fewer semiconductors than those sold in advanced economies.
According to Nikkei Asia, the easing of the automotive chip crunch in 2022 provided a springboard for a recovery. Along with Maruti Suzuki, Tata Motors and other Indian automakers saw sales grow during last year.
India is home to 1.4 billion people, and its population is expected to outstrip China sometime this year and continue growing until the early 2060s. Incomes are rising as well.
Only 8.5 per cent of Indian households owned a passenger vehicle in 2021, according to British research firm Euromonitor, meaning there is plenty of room for sales growth. The government has started offering subsidies for EVs amid a trade deficit resulting from petroleum imports.
In Japan, 4,201,321 vehicles were sold last year, down 5.6 per cent from 2021, according to data from the Japan Automobile Dealers Association and the Japan Light Motor Vehicle and Motorcycle Association.
Nikkei Asia said the omicron epidemic and the lockdowns in China greatly undercut production, leaving automakers unable to meet demand.
Japan's auto sales peaked in 1990 at 7.77 million units, meaning sales have tumbled by nearly half from the all-time high, according to Nikkei Asia. And the country's declining population offers little prospect for a significant recovery in sales in the foreseeable future.
According to Nikkei Asia, 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.