Synopsis
India's two-wheeler market is projected to achieve an 8-10% growth next year, following a 12-14% increase this fiscal year. Factors such as strong rural demand, urban interest in premium models, and diverse offerings drive this trend, as reported by Crisil Ratings.Key Takeaways
- Projected growth of 8-10% next year.
- Revenue increase of 10-12% expected.
- Domestic sales account for 85% of the market.
- Strong demand from Africa and Latin America.
- Shift towards premium motorcycles and scooters.
New Delhi, Jan 31 (NationPress) Following an estimated 12-14 percent growth this fiscal year, India’s two-wheeler sector is projected to expand by an additional 8-10 percent in the forthcoming year, according to a report released on Friday.
The Crisil Ratings report indicated that this growth trajectory will allow sales to exceed the previous record of over 24 million units achieved in 2019, reaching a new peak.
This upward trend is primarily attributed to four significant factors: robust rural demand, increasing urban interest in premium motorcycles, enhanced export opportunities, and a wide variety of models, including electric two-wheelers (e2Ws), as stated in the report.
Additionally, the revenue for two-wheeler manufacturers is anticipated to rise by 10-12 percent in the next fiscal year, following an approximate 16 percent increase this year.
This growth will be propelled by elevated sales volumes and a transition towards premium models that yield higher profit margins.
Furthermore, the operating margin of original equipment manufacturers (OEMs) is expected to hit a decade-high of approximately 15 percent this fiscal year and remain stable into the next.
This marks an improvement from the average of 14 percent observed over the last three years. Increased exports and the trend towards premiumization will further enhance profitability.
Domestic sales constitute nearly 85 percent of the two-wheeler market, with exports making up the remainder.
“Rising rural incomes and growing interest in premium internal combustion engine (ICE) vehicles and electric two-wheelers will drive this growth,” remarked Anuj Sethi, Senior Director at Crisil Ratings.
The expert predicts that domestic demand is likely to increase by 7-8 percent in the upcoming fiscal year.
Conversely, exports are anticipated to expand at an accelerated rate of 11-12 percent, buoyed by strong demand from Africa, Latin America, and other emerging markets.
Motorcycles continue to lead the Indian two-wheeler market, accounting for nearly two-thirds of ICE vehicle sales.
As consumer preferences shift towards high-performance vehicles, premium and executive motorcycles (over 110cc) now capture more than 50 percent of the market.
Moreover, consumers are increasingly interested in larger-engine scooters for a more powerful and comfortable riding experience, according to the report.
This fiscal year alone, the segment is expected to grow by around 27 percent, with a similar double-digit growth anticipated next year as well.
