The two-wheeler industry has begun the fiscal on a buoyant note, with double-digit growth in sales in the first quarter, on the back of a pick-up in urban and semi-urban markets.

Hopes of a revival in rural markets are adding cheer to manufacturer sentiment.

While the final numbers are awaited from auto lobby SIAM, indications are that the two-wheeler industry has grown by 14-15 per cent during the quarter. The growth has been broad-based, with scooter sales rising over 25 per cent, and bikes by about nine per cent.

These are heartening figures as 2015-16 had been a lacklustre year with a modest three per cent growth at 16.5 million units. Bike sales shrank by 0.2 per cent, though scooters reported a 12 per cent growth. While urban centres aided demand to some extent, weakness in rural sales, due to sluggish wage rates and unfavourable monsoons, hit overall industry performance.

For Honda, the fiscal began on “good note” with over 20 per cent growth in sales, said YS Guleria, Senior Vice-President, Sales & Marketing, HMSI. The growth, however, moderated towards the end of the first quarter, he told BusinessLine . “However, we, at Honda, could sustain the initial increase with 22-23 per cent growth in domestic volumes,” Guleria said.

“The growth was mainly due to a strong increase in volumes in urban and semi-urban markets, led by automatic scooters, which continue to sustain strong double-digit growth,” he added.

Growth in bike sales

Motorcycles underpin the growth with an increase of about nine per cent over the first quarter of last year.

“These numbers are good when you come out of a lower growth regime. Last year, the growth rates were really disappointing. Motorcycle sales dropped two per cent in the first quarter last year,” said Eric Vas, President-Motorcycles, Bajaj Auto.

Icra’s Senior Vice-President – Corporate Rating, Subrata Ray, pointed out that during first two months festive and wedding season demand, besides additional volumes from new product launches, supported the growth of two-wheeler market.

Now, the industry looks forward to a revival in rural demand on the back of a favourable monsoon to sustain the present growth, and end the year, with better-than-expected growth rate.

“ Also the Seventh Pay Commission hike, which will put more money into the hands of government employees, should drive additional growth for the two wheeler segment this fiscal,” said Guleria.

Bajaj, the second-largest two-wheeler firm by volumes, is eyeing better growth in the second quarter. “We expect more than nine per cent growth during the quarter as against a 6 per cent drop in the comparable quarter last year,” stated Vas.

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