Evolution of the Indian market in 2022-2023
- Among the Asian growth markets, the Indian automotive market is one of the most promising alongside the Chinese market. Since 2014, continuous growth has been observed, interrupted only by the Covid19 pandemic, which caused the market to shrink to less than 3 million vehicles sold by 2020. However, the market recovered as quickly as it collapsed, with growth rates of 28% in 2021 and 26% in 2022, scratching the 5 million mark by the end of 2022, which will most likely be exceeded in 2023, barring any disasters.
- The Indian automotive market benefits from the fact that it is not yet saturated. In 2019, the motorization rate was 225 vehicles per 1,000 habitants, and the population is growing rapidly every year. Moreover, this growing population is becoming more wealthy and moving to urban areas, which enables or requires the purchase of a car.
- The market is dominated by Japanese carmaker Suzuki, which alone holds 34% of the Indian market in 2022, followed by Indian carmaker Tata-Motors with 19% market share. Korean carmaker Hyundai-Kia has a market share of about 17%. These three carmakers, along with Mahindra and Ashok and Japanese carmakers Toyota and Honda, account for more than 91% of the market in 2022. Will Chinese carmakers succeed in breaking this physiognomy in 2023? The most successful Chinese brand to date is MG, with a market share of only 1%.
- Japanese dominance also affects xEVs sales (BEV+HEV+PHEV), which account for only less than 2% in the Indian market in 2022. 91% of xEVs sales are hybrid cars, a Japanese specialty, 9% are BEVs, and unlike Europe, plug-in hybrids (PHEVs) hardly exist there. Cars with alternative engines still seem too expensive for this emerging market and the infrastructure for BEVs is not there. But India must look in this direction if it wants to tackle environmental problems with a population that could soon surpass China.