A piece of great news which was expected has finally blessed the Indian auto industry. The news is that India has now once again regained its position and became the 4th largest car sales market, beating the likes of the European automotive hub Germany. According to the most recent figures from OICA, the Organisation Internationale des Constructeurs d’Automobiles, India sold 3,759,398 automobiles in 2021, compared to 2,973,319 in Germany. This equates to an almost 26 percent difference between the two nations.
It was in 2019 when India last held the fourth position in the largest car sales market list and it was anticipated that it could also grab the third position by 2025. Currently, the third spot is held by Japan which saw sales of 4,448,340 units in 2021. The Indian automotive market currently has a tonne of possibilities to reach that third spot since vehicle penetration in the personal mobility arena is roughly 33 automobiles per 1,000, which is one of the lowest in the developed world.
There is also a need for the commercial cars segment to be propelled by infrastructure and e-commerce. According to industry observers, the segment is also yet to witness its prime. However, given the continued hurdles, particularly supply chain concerns and fluctuations in critical raw material costs, retail sales in the domestic market may not be as strong as one would expect.
It’s also worth noting that India was the only country in the top five worldwide markets to have double-digit growth (28 percent). Although China remains the largest market, automotive sales have stayed practically unchanged. Similarly, the United States claimed a 4% increase, but it was lower than in 2019. In comparison to both 2020 and 2019, the Japanese market shrank to number three.
Earlier the same was predicted in December of 2021 as well. According to a report by the Center for Automotive Research (CAR), it was forecasted that more cars will be sold in India than in Germany. The European shortages in semiconductors were accredited for this phenomenon. The shortages lasted till the first half of 2022 and the latest version of the coronavirus caused much disruption to sales in Europe.
In other news, it was reported back in April of this year that Italy also dropped from the list of top 10 biggest car markets in terms of sales of light vehicles in 2021. As per the data, Italy retained the spot of the 12th largest car market with a total sales of around 2 million vehicles in 2021. The home country to the legendary automakers Ferrari and Lamborghini was passed by Russia in the list but it did manage to stay above Mexico.
Apart from Italy, countries like France, UK and Spain despite still remaining in the top 10 list have suffered a slowdown in total sales of vehicles. Some industry experts believe that this dip in sales is because of the strict emission norms in these countries. Meanwhile, others believe that the governments of these countries are either prioritizing public transportation or electric mobility or both as well.