The two-wheeler retail sales market in India is experiencing a notable resurgence in the financial year 2023-24. After several years of stagnation, the sector is showing promising signs of revival, with the first half of the financial year (H1FY24) recording a 7% year-on-year (Y-o-Y) growth in sales, totaling 7.8 million units. September alone saw an impressive 22% surge in sales, amounting to 1.3 million units, according to data from the Federation of Automobile Dealers’ Associations (FADA). This growth can be attributed to several key factors, including a prosperous rabi season, increased wedding activities, and relatively favorable monsoon conditions.
Expectations for the Fiscal Year
Market analysts are cautiously optimistic about the sector’s prospects for the entire fiscal year 2023-24. They anticipate that annual sales growth will fall within the range of 8% to 12%, indicating a positive outlook for the two-wheeler industry.
A Historic High in September Sales
The highlight of this revival was the remarkable monthly sales figure of 1.3 million units in September, which not only exceeded the performance of the same month in the previous year but also surpassed the pre-Covid September 2019 sales figure.
A Comparison of H1FY24 Sales
During H1FY24, two-wheeler sales reached 7.8 million units, surpassing the previous year’s H1FY23 figure of 7.3 million units but remaining short of the H1FY20 high of 7.9 million units. The two-wheeler sector still has some ground to cover to reach the H1FY19 peak of 9.7 million units.
Factors Driving the Resurgence
Hemal N. Thakkar, Senior Practice Leader and Director of Crisil Market Intelligence and Analytics, pointed out that the recovery in the two-wheeler industry exceeded expectations. Factors contributing to this resurgence include more modest price increases for on-board diagnostics (OBD) than initially projected and a noticeable uptick in the scooter category. Thakkar anticipates a sales growth rate of 8-12% for FY24.
The revival in the economy, coupled with improved sentiment related to last year’s rabi (winter crop) and the marriage season, has played a vital role in this resurgence. While the monsoons have been less than ideal, the overall effect on the sector has been mixed.
Notable Performers in the Market
In September, almost all players in the two-wheeler market saw growth, with Hero MotoCorp taking the lead with a remarkable 31% increase in sales. The company’s market share has now risen to 27%, compared to 25% the previous year. Honda Motorcycle and Scooter India experienced a 17% sales increase but saw its market share decline from 28% to 27%, placing it at the second position. TVS Motor recorded a 28% sales increase, while Bajaj Auto saw a substantial 29% growth. Industry experts are optimistic about the upcoming festive season and anticipate improved numbers.
Positive Trends in the Premium Segment
Even in the premium segment, increased competition, such as the launch of Harley Davidson (HD) X440 and Triumph Speed 400, has had a positive impact. The market leader, Royal Enfield, witnessed a 9% increase in sales during the month.
Anticipating Growth in the Festive Period
Industry experts believe that the all-time high sales numbers in September are a promising sign for the upcoming festive season. The key impact is expected during the Navratri and Diwali festivals, driving further growth.
