The Indian light vehicle market is growing the fastest among the top 10 markets: S&P

According to S&P Global Mobility's forecast, India will be the fastest growing of the world's ten largest automotive markets this calendar year, compared to pre-pandemic year 2019. India is the world's third largest light vehicle market (including cars and light commercial vehicles of less than 6 tons), after China and the United States.

According to the forecasting firm, car sales in India are expected to rise 36 percent from 2019 levels to 4.8 million units in 2023. US car sales are expected to decline 9 percent compared to the same period, while in China is expected to see a 2 percent increase from 2019. The remaining seven markets are likely to see single- to double-digit declines in 2023 from 2019, the forecast said.

Henner Lehne, vice president of vehicle and powertrain group, S&P Global Mobility, was quoted by ET as saying that auto sales are recovering in global markets after bearing the brunt of the 2020 Covid-19 pandemic, the chip crisis and subsequently the consequences of the war between Russia and Ukraine. The transition to electric vehicles has also led to an increase in production costs.

He added that India is in good shape as it recovered quickly. Although countries have shown signs of growth, they are not performing better than the year before the corona crisis.

Auto sales in India reached a record high of 3.8 million units in the financial year 2022-23, surpassing the pre-Covid peak of 3.3 million units in FY19. Since FY23, passenger car sales in India have increased month-on-month. November sales reached a new high of 334,000 units, driven by the holiday season. Demand is seen to increase in FY24, but at a slower growth rate due to the higher FY23 base.

Demand for chips rose exponentially in 2021 as Covid-19 restrictions were lifted, causing a shortage. The strong demand also caused capacity allocation issues.

Lehne stated that India enjoyed an advantageous position as the chip content in vehicles produced in India was lower than in the US and Europe.