Two-wheeler demand in fast lane, thanks to rural demand
April and May have already given the industry a taste of the things that might unfold in the road ahead with sales figures that registered a growth of 16%
Buoyed by improving consumer sentiment and overall macroeconomic indicators, demand for two-wheelers has moved into the fast lane, providing relief to the industry that has suffered lukewarm demand in the past few years and encouraging it to look forward to double-digit sales growth in FY24.
April and May have already given the industry a taste of the things that might unfold in the road ahead with sales figures that registered a growth of 16% (yoy). Society of Indian Automobile Manufacturers (SIAM) have put the absolute number of units sold in the first two months of the current financial year at 2,810,138.
For the entire FY24, SIAM has projected sales of 1.8 crore units, up from 1.586 crore units in FY23. The industry body has also admitted that the demand for premium models has been encouraging. Some industry veterans are sure of even notching up higher numbers.
Reporting this change in mood of the industry, The Economic Times has attributed the surge in a perceptible change in buying sentiments in rural India that contributes to about 55% of the demand of two-wheelers in the country.
SIAM has listed a number of factors that has could engineer this spurt. Apart from release of pent-up demand aided by falling inflation, it has pointed to improved agricultural output, rise in minimum support prices for the kharif season, sufficient water for irrigation, state spending on rural development projects and easily available financing options. All these, the industry body said, will propel consumer sentiments by putting more disposable income in the hands of the population in the villages.
“The potential in future is very high. We will get back to sales of 20-21 million (2-2.1 crore) annually surely,” asserted Atsushi Ogata, former president of Honda Motorcycle & Scooter India. The company would launch about half a dozen models that includes two electric ones.
Ranjivit Singh, chief growth officer of Hero MotoCorp said, “We saw good momentum this marriage season and feel the festive season will be better.”
The sales spurt has engineered a turnaround in the fortunes of Bajaj Auto. “On the back of an improvement in the economic situation, consumer confidence is returning. There is more certainty of maintaining regular incomes, purchasing power is on the rise. This coupled with retail finance, is driving penetration,” the newspaper quoted Bajaj Auto executive director Rakesh Sharma saying in a recent interaction.