India is likely to overtake Japan to become the third-largest car market in the world, for the second year in a row, S&P Global Mobility has stated. It adds that the growing economy, higher disposable income, rising aspirations of the middle class, and the rapid pace of infrastructural developments is accelerating this trend.
Autocar Professional was the first to report on India overtaking Japan, in January of 2023.
S&P Global further added that ambitious policy initiatives and industry support extended by the current government provide a strong impetus for the industry to excel in the right direction. India is committed to a final goal of net zero emissions, and the automotive sector is a key contributor in leading the task of carbon footprint reduction. From adopting cleaner fuels, making more efficient vehicles, and switching to electric vehicles, the Indian automotive industry is leading the decarbonisation journey. The Indian automotive sector has developed innovative solutions by providing efficient “long haul” and “last mile” connectivity, it added.
The forecasting agency states that the Indian market will touch 6.1 million units by 2030.
But while the industry is poised to continue this growth trend in the future, it will be challenged by infrastructure hurdles, particularly within cities. Urban centres are India’s growth engines; however, due to the massive influx of cars in cities, hyperlocal commuting challenges like congestion and pollution are detrimental to the India Growth story. This will make personal mobility far more important than individual car ownership, spurring demand for public transport and new and innovative shared mobility solutions.
In a heterogenous market like India, there will always be diversity in consumer needs – especially depending on the region of the country. Consumer adoption and penetration of technologies like ICE, BEV, hydrogen, flex fuel, biofuel, and natural gas each could have specific regional presences based on local infrastructure and grids.
In India, the world’s most populous nation, the mobility of 1.4 billion people will be defined in line with improvements in infrastructure, investment, innovation, and inclusivity, S&P Global added.