Two-wheeler sales in India to outpace passenger vehicles this year
What's the story
A report by Philip Capital has predicted that two-wheeler sales in India will outpace passenger vehicle sales for the rest of this year. The growth is largely attributed to strong festive demand and improved rural sentiment. The report also highlights selective discounts and strong wholesale momentum as key factors supporting this trend, with rural demand witnessing a significant uptick during the festive season.
Market leaders
Selective discounts driving 2-wheeler sales
The report highlights that major players like Hero MotoCorp and TVS Motor are at the forefront of this growth, with motorcycles outpacing scooters in sales. It also notes that discounts in the two-wheeler segment are very selective, unlike those for passenger vehicles which are gradually declining. This selective discounting strategy is likely contributing to the sales of two-wheelers.
Seasonal impact
Rural demand and wedding season boost sales
The report also highlights that rural demand picked up in the last week of Diwali, as farmers received payments from mandis. This coincided with the wedding season, further boosting the sales. It predicts that the retail optimism is likely to continue until mid-December, supported by strong festive demand. The festive season has also seen a notable trend of upgradation among buyers.
Brand analysis
Strong festive growth for major players
The two-wheeler market has witnessed strong festive growth, led by Hero MotoCorp, TVS Motor, and Royal Enfield. Bajaj Auto lagged slightly behind in this festive surge. Hero reported over 40% YoY growth driven by its popular commuter and 125cc models. TVS achieved roughly 35% growth with motorcycles like Raider and Apache outperforming scooters.
Performance review
Royal Enfield's growth and Bajaj Auto's modest performance
Royal Enfield recorded a growth of 30-35%, mainly from sub-350cc models. The growth was supported by brand loyalty, premium upgrades, and attractive financing options. However, Bajaj Auto's performance remained modest with low double-digit growth due to no new launches or discounts and less advertising and promotion. The company also created confusion among customers by having multi-sub variants.