India has retained its position as the third-largest light vehicle market in the world in 2023. In what was a close finish to the No. 3 position, Japan made a resounding comeback in 2023, registering 14 percent growth as against India’s 8 percent.
Japan ended 2023 a shade below 4 million cars, whereas India sold 4.11 million units. The gap between India and Japan has reduced from 3,44,000 in 2022 to 1,15,000 units in 2023.
- India sold over 4.11 million cars in 2023
- Japan saw 14 percent growth as against India’s 8 percent
- Made-in-India exports critical for future growth, say experts
This was a third consecutive year of growth for India, hitting a new peak in 2023. Much like matured markets, SUVs stole the show with a share of over 48 percent of total passenger vehicle sales in the country. Despite the narrow finish, India is likely to keep its lead on the passenger vehicle sales and its stakes in the global scheme of things is only going to grow.
“With its growing and young population, economic growth and rising motorisation levels India has seen a steady growth in its passenger vehicle [PV] industry in the last three decades. This has catapulted India to the No. 3 position in PV volumes, ranking only only China and the US. Expectedly, this trend should continue in the future as well,” said Shashank Srivastava, senior executive officer, Sales and Marketing at Maruti Suzuki India.
Indian exports expected to grow rapidly from 2025
However, India still significantly trails Japan from the production perspective for light vehicles. In 2023, India registered a growth of 6.8 percent with volumes of 5.45 million units, as per S&P Global Mobility. “We expect Japan to post 8.59 million units in 2023, while India is at 5.45 million,” says Gaurav Vangaal, associate director – S&P Global Mobility. He adds that it is only in 2030 that India will overtake Japan as the third biggest light vehicle producer in the world.
In terms of exports of light vehicles, Vangaal expects the number to cross the one-million mark only by the end of the decade. “Indian exports are expected to increase rapidly from 2025. Today, almost every carmaker here is strategising to utilise India as an export hub, a trend we have also noticed with capacity expansion by almost every carmaker,” he added.
Vangaal’s prediction appears modest, given that PV market leader Maruti Suzuki itself has issued a guidance for tripling exports to 7,50,000 units by 2030. Also, with the likes of Hyundai, Kia, Renault-Nissan and Volkswagen-Skoda upping the ante on exports, India is set to play a bigger global role in the years to come. Furthermore, new-age players like Tesla and VinFast, along with India’s Tata Motors and Mahindra & Mahindra, who are harbouring global ambitions, India’s stake should surely move up further.
According to S&P Global Mobility’s output forecast for India, the share of the country in the global industry volumes will increase to almost 8 percent. This is almost double the share India had of around 4 percent just ahead of the Covid-19 pandemic.
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