This festival season proves to be a bumper for most of the vehicle categories. But the major highlight is the surge in enquiries and demand in the entry bike segment, on the back of improved rural demand. The momentum is likely to be sustained, supported by replacement demand, point out industry analysts.

The recently-concluded festival season brought cheer to the automotive industry, with retails across various segments staying strong and representing moderate-to-healthy growth on a year-on-year basis. Two-wheeler and commercial vehicle segments reported double-digit growth, while the passenger vehicle segment witnessed a high single-digit increase in volumes.

“There was a robust growth in two-wheeler retails (about 21 per cent y-o-y), aided by festive cheer, upcoming marriage season, and some recovery in rural demand,” said rating agency ICRA.

Wholesale segment

During this October, total wholesale in the entry bike segment reported a good growth at 6.23 lakh units when compared with 4.64 lakh units in October 2022.

“We saw good demand for the entry-level bikes during the Dussehra period and in November, demand was robust during the first fortnight. Overall, entry bike volume growth is much higher in this festival season compared with last year. We expect the demand to be good during the December and January period,” said a dealer of a leading two-wheeler maker.

Analysts at JM Financial Institutional Securities said its channel checks with dealers across 11 States indicated that the entry-level segment witnessed strong recovery during the festive season supported by recent launches, promotions and discounts, and finance schemes.

Rural demand up

Dealer of Hero MotoCorp, which has more than 75 per cent share in the 110cc and below bike segment, which accounts for about 38 per cent of the motorcycle market, highlighted that enquiries / retail sales in the entry-level segment were led by positive consumer sentiment during the festival period. Urban demand continues to do well. However, the rural segment, which was lagging urban region pre-festival, also witnessed healthy demand recovery, added the analysts.

In States like Tamil Nadu, a major two-wheeler market, demand for entry-level models remained healthy led by Hero’s Splendor and Passion.

Entry-level segment reported a fragile recovery in the post-Covid period due to a significant increase (25 per cent plus) in the price of new two-wheelers, as a result of changes in regulations and muted sentiments of rural buyers, a major segment in the purchase of 110cc motorcycles.

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