India overtakes Germany to become 4th largest vehicle market
The Covid-19 led pandemic has impacted the global automotive industry. Leaving no country untouched, it has changed the way we think, eat, live and very well move. But when one looks at the global vehicle sales data, India has once again overtaken Germany to become the fourth largest automotive market.
According to the latest numbers sourced from OICA, the Organisation Internationale des Constructeurs d’Automobiles – the international trade association formed of 39 national automotive industry trade associations – India saw 3,759,398 vehicles sold in 2021, compared to 2,973,319 vehicles in Germany. This translates to a difference of almost 26 percent.
Interestingly, it was in 2019 when India had first grabbed the fourth spot and was expected to become the third-largest by 2025. It’s still possible for the country to reach the place, but it would mean surpassing Japan which saw sales of 4,448,340 units in 2021.
The opportunities in the Indian market is that vehicle penetration in the personal mobility space is around 33 vehicles per 1,000, which is one of the lost compared to the developed market.
Then there is the infrastructure and e-commerce driven demand for commercial vehicles. In fact, according to industry watchers, the segment is still to witness its glory days.
But on the other hand, if one looks at the ongoing challenges, especially with the supply chain issues and rice in prices of key raw materials, the retail sales in the domestic market may not be as one would like it to be.
Also it is interesting to note is that as per a recent finding report by CRISIL, there is also a shift happening in the Indian passenger vehicle space, where the growth in the premium vehicle segment (cars priced above Rs 10 lakh) is faster than in the entry-level segment.
What’s important to note is also the fact that amongst the top 5 markets globally, India was the only country to report double-digit growth (28%). China continues to remain the biggest market, but automobile sales remained almost stagnant. Similarly, USA too reported 4 percent growth but was in the negative when compared to 2019. At number 3, Japanese market shrunk compared to both 2020 and 2019.