India could soon replace Germany as 4th largest car market

• Indian Vehicle Market posted the world's 2nd highest volume increase in 2017

• India was the world’s 5th biggest vehicle market behind Germany and ahead of the United Kingdom

• Passenger car sales totalled 3.23 million units, up by 7.7%

• For the first time, SUVs counted for more than 20% of the market

Solid 2017 for the Indian vehicle industry as new car and light commercial vehicle sales soared by 8.8% to a record of 3.61 million units. Therefore, last year’s results broke the last record achieved in 2016 when 3.32 million vehicles were sold. Good economic conditions along with better deals and more cars to choose from boosted sales and allowed India to keep its key position in the global ranking. It was the third year in a row of growth, and at the same time the highest percentage growth since 2012. 

India was the world’s 5th largest vehicle market getting very close to Germany, in the 4th position, as the gap between them reduced from 287,000 units in 2016 to only 96,200 vehicles last year. These encouraging results were possible thanks to a solid volume growth which was the world’s second largest after China. Both passenger cars and light commercial vehicles drove the growth with increases of 7.7% and 19.2% respectively. 

“The Indian car market is firmly heading to the world’s top 3. This time, there is enough evidence to predict strong growth in the coming years as more car makers localize their production and more modern models hit the roads. It is likely to see India ahead of Germany this year” said Felipe Munoz, JATO’s global automotive analyst. 

City-cars and subcompacts counted for almost 2 in 3 cars sold in India in 2017. However, only the subcompacts posted a positive change with volume up by 9.7% to 1.11 million units, or one of the world’s biggest markets for this kind of car. The city-cars’ volume remained stable at 987,800 units, down by 0.4% compared to 2016 figures. 

SUVs were the third largest segment with sales totalling 693,900 units, up by a massive 31.8%. India is one of the latest markets to join the SUV boom just as USA, Europe and China have done already. These vehicles counted for 21.5% of total passenger car sales, or 3.9 percentage points more than the share seen in 2016. The arrival of small, cheaper and more modern SUVs is boosting this segment as the figures by subsegment show: B-SUVs volume grew by 36.5% to 508,400 units.