India Surpasses Japan to become a 3 rd Largest Auto Market Globally

India overtook Japan in auto sales in 2023, moving to the third place for the first time. In a recent report by Nikkei Asia, India’s sales of new vehicles came in at least 4.25 million units, based on preliminary results, topping the 4.2 million sold in Japan.

Between January and November 2023, 4.13 million new cars were delivered in India, according to the Society of Indian Automobile Manufacturers (SIAM). The number rises to almost 4.25 million units when the sales figure for December, which Maruti Suzuki, the largest automaker in India, reported on January 1, is added.

Comparatively, in Japan, 4.20 million vehicles were sold last year, down 5.6 percent from 2021, according to data from the Japan Automobile Dealers Association and the Japan Light Motor Vehicle and Motorcycle Association.

India’s automobile sales volume is expected to jump even further up with the inclusion of pending fourth-quarter sales figures for commercial vehicles, along with year-end results yet to be released by other automakers such as Tata Motors.

Consecutive double-digit growth for India

India was the fastest growing market in 2023 and no other country posted consecutive strong double-digit growth (over 20 percent) in the world. To be sure, in its earlier press note in 2023, S&P Global Mobility had already stated that India overtook Japan to become the third largest car market in the second and third quarters of 2023. Calling it a bronze medal position, the note stated that the race for third place was on. So, it was almost a given that, with a record festive season, even on a full year basis, India would be ahead.

A year back in 2022, China remained the global world leader in automobile sales with 26.27 million units, followed by the US at the second position at 15.4 million vehicles, and Japan at 4.44 million units. Nikkei Asia further reported that India’s automobile market has fluctuated in the recent times as the country managed to sell 4.4 million vehicles in 2018 but the volumes dipped below 4 million units in 2019 and the sales further plummeted below 3-million-unit mark as the covid-19 pandemic triggered a countrywide lockdown in 2021.

Sales recovered in 2022 to approach 4 million units, but the shortage of automotive chips weighed on growth.