FY23 saw an initial rebound in two wheeler segement with an 8 per cent year-on-year growth, and this momentum continued into FY24 with a 9.8 per cent
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The Indian two-wheeler industry is poised for continued growth in fiscal year 2025 (FY25), driven by a combination of factors including rising domestic sales, increasing demand for premium motorcycles, and the burgeoning electric two-wheeler (E2W) segment. This positive outlook emerges after a period of decline following the COVID-19 pandemic, with FY20, FY21, and FY22 all witnessing a drop in sales volume.
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A report from CareEdge Ratings paints this optimistic picture for the two-wheeler industry. FY23 saw an initial rebound with an 8 per cent year-on-year growth, and this momentum continued into FY24 with a 9.8 per cent increase in sales volume, reaching 2.14 crore units. While this hasn’t quite reached the peak recorded in FY19 of 2.44 crore units, it signifies a clear recovery trend.
Domestic market powering forward
Fueling the domestic market’s growth momentum in FY25 are several anticipated factors. Firstly, potential interest rate cuts in the latter half of the year could make two-wheelers more affordable for buyers.
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Additionally, manufacturers launching exciting new models are expected to pique consumer interest and drive sales. Furthermore, a revival in key export markets, which previously faced hurdles like inflation and currency fluctuations, is expected to contribute positively to the overall industry growth.
Finally, a good monsoon season could bring a welcome boost to rural consumer sentiment and income levels, potentially leading to a rise in demand for two-wheelers.
Electric two-wheelers: A game changer
Interestingly, the report attributes the rise of electric two-wheelers as a significant factor propelling the industry forward. Consumers are increasingly drawn to the benefits of EVs, including lower fuel costs, reduced maintenance requirements, and environmental friendliness.
The government’s FAME II program, which offered subsidies for EV purchases until FY24, played a crucial role in making EVs more affordable and facilitating their growth. The newly introduced Electric Mobility Promotion Scheme 2024 (EMPS 2024) is expected to further bolster this trend.
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However, while EVs are stealing the spotlight, traditional segments continue to hold their ground. Motorcycles remain popular due to their fuel efficiency, affordability, and versatility. Scooters, particularly favoured by urban commuters, also contribute significantly to the overall market. The rise of premium and executive segment motorcycles further diversifies the market and caters to a specific consumer base.
The Indian two-wheeler industry is on track for a promising future in FY25. A combination of factors, including a robust domestic market, the growing popularity of EVs, and the continued appeal of traditional segments, will likely contribute to sustained growth. As manufacturers introduce innovative new models and the government implements supportive policies, the two-wheeler industry is well-positioned to navigate the road ahead.
First Published Date: 10 Jul 2024, 09:00 AM IST