Newsnomics AJAY ANGELINA reporter | India has overtaken Japan to become the world’s 3rd largest vehicle market in 2022 after China, and the US. 

In a recent report by Nikkei Asia, the total rise of 4.4 million units in Indian new vehicles sales, based on preliminary, is topping with the 4.2 million sold in Japan.

The country’s top-selling models for 2022 include Maruti Suzuki Baleno, followed by the Tata Nexon, with Maruti Suzuki’s Alto, Swift and Wagon R rounding out the top five.

“About 4.13 million auto vehicles, including passenger and commercial are sold in India between January and November 2022.whereas Maruti Suzuki, India’s largest carmaker brings the total to roughly 4.25 million units in December,” according to the Society of Indian Automobile Manufacturers. 

Still, the results yet to be released by Tata Motors and other auto makers is pending.

Anand Mahindra, the chairman of Mahindra group tweeted on Monday, “when I went to business school in the 80s, the world was obsessed with the rise of Japan in the auto world. If I have told my international class mates that India would one day surpass Japan in terms of output (yes, much to learn in quality) I would have been laughed at.”

Nikkei Asia said, the Indian vehicle market has grown at a CAGR of 23.40 percent since CY 2016.  It grew by 5.11 percent in 2018, 7 percent in CY 2019 and the growth of 23.40 percent in 2022. While commercial vehicles are expected to grow at a CAGR of 6.9%, two-wheeler will show an increase of 8.9% and passenger cars growing at a CAGR of 10.4%. With a massive growth of 23.40 percent. India is poised to grow further which will be evident in either CY 2023 or CY 2024. 

Brokerage Nomura has forecast sales of 3.83 million PVs in 2022-2023, up 25% from 3.06 million units in the previous fiscal.

Comparatively, in Japan 4, 201,321 vehicles were sold last year down 5.6 percent from 2021 shows the data provided by the Japan Automobile Dealers Association and the Japan Light Motor Vehicle & Motorcycle Association.

Japan 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.

Whereas, China continued to lead the global auto market with 26.27 million vehicles sold in 2021. And the US remained second at 15.4 million vehicles followed by Japan at 4.44 million units.

However, India was the fastest growing market in 2022 and no other country posted consecutive strong double-digit growth (over 20 percent) in the world. To be sure, in its earlier press note on November 1, 2022, 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 2022. 

Still, it can be predicted that India will continue to be the third-largest automaker in the coming years. The growth in GDP and population will provide the impetus for more and more vehicles to be sold in this country.

It is expected that there will be a growth of at least 5 percent annually in the next five years as India is now home to 1.4 billion people. Its population is expected to outstrip China sometime this year and continue growing until the early 2060. On the other hand, the incomes are rising as well.