India Becomes 3rd Largest Auto Market, Overtake Japan

According to the Federation of Indian Automobile Dealers Associations (FADA), total car sales in 2022 reached 4.725 million vehicles, an increase of 25.7% from 2021. As a result, India's total car sales (units) annual sales surpassed Japan for the first time in history, becoming the third largest car market in the world after China and the United States.

From the data analysis, sales of passenger cars in India increased 23 percent year-on-year to about 3.792 million units in 2022; sales of commercial vehicles rose 37.8 percent year-on-year to about 933,000.

While in the electric vehicle market, 999,949 EVs were sold in 2022, an increase of 210% over the previous year. However, two- and three-wheeled vehicles dominated the market. The cumulative sales volume of electric four-wheelers was only 37,792—accounting for 4% of the total sales volume of electric vehicles—Tata Motors sold 30,284 EVs (80% of the all EV market), and MG sold 3,390 vehicles (9%).

It is worth noting that the Indian auto industry is expected to expand further in the Indian auto market in 2023. The 2022 result was largely due to an improvement in semiconductor chip supply and pent-up demand, plus automakers offered deep discounts at the end of the year, boosting sales.

On the other hand, new car sales in Japan fell 5.6 percent yearly to 4.2 million units in 2022, their lowest level in 45 years. Car sales in Japan are half their 1990 peak as the market continues to shrink due to an aging population.