India Overtakes Japan In Automotive Market: Produces 2.7 Crore Vehicles In FY 22-23

Published: Thursday, June 29, 2023, 15:32 [IST]

A recent report from Primus Partners Pvt. Ltd. states that India overtakes Japan in automotive vehicle production in FY 2022-23. The Indian automotive brands have produced over 2.7 crore vehicles valued at $108 billion in the last financial year.

The Indian automotive sector showcases its robust growth and contribution to the country's economy. Let's delve into the details of this remarkable achievement and explore the factors behind India's thriving automotive landscape.

India Overtakes Japan In Automotive Market

In terms of production, two-wheeler production accounts for 77% making Indian number 1 in the world for the segment. Passenger four-wheelers add 16% to the production number. Commercial vehicles and three-wheelers constitute 4% and 3% of the total production numbers.

Coming to the value, the story is very different. Passenger four-wheelers add over half of the value at 58%. Two-wheelers account for 21%, while commercial vehicles and three-wheelers add up to 19% and 2%, respectively. This brings the total production value to Rs 8.71 Lakh Crores.

Deep diving into the passenger four-wheeler sales, here is a segment-wise breakdown of the production numbers and value gained from Rs 5.02 lakh crore.

Segment	Prodcution Share	Value Share
Hatchback	44%	28%
Sedan	6%	7%
SUV	38%	39%
Full-Size SUV	9%	13%
Luxury	3%	13%

India's EV industry is lagging behind China, the US, and the EU, but significant investments suggest a potential for substantial growth in the coming years. In 2022, 1.05 crore EVs were delivered worldwide, a 55% increase from 2021, with India mainly focusing on two-wheelers and three-wheelers.

Only 46,000 EV passenger vehicles were sold in FY23, representing just over 1% of total sales. The Indian government has actively supported EV growth through policies like the production-linked incentive (PLI) scheme, attracting investments from companies like Maruti, Ola, Hyundai, and Mahindra. Other companies are also investing in the EV market, indicating a strong commitment to its expansion.

According to the report, several factors have fueled the remarkable growth. Firstly, the country's burgeoning middle class, rising disposable incomes, and increasing aspiration for personal mobility have propelled demand for vehicles. Additionally, favourable government policies, such as the "Make in India" initiative and the introduction of Goods and Services Tax (GST), have played a pivotal role in attracting investments and bolstering domestic manufacturing.

Sharing the report titled India's Automobile Industry is Valued at INR 8.7 Lac Crore, Anurag Singh, Managing Director, Primus Partners, said, "Our ground-up study on Automobile industry value is leading to a lot of insights, for example, the Indian market is bypassing the lower priced products & more value is being created at in feature-rich higher priced vehicles. We believe that the value growth is happening faster than volume growth."

Thoughts About India Overtaking Japan In Automotive Market

India's automotive industry excelled in FY23, producing 2.7 crore vehicles worth $108 billion. It showcases the industry's strength fueled by a growing middle class, supportive policies, technological advancements, and greener mobility solutions. This achievement boosted employment and holds immense potential for India's future progress in the automotive sector.