1. Why are rural markets vital for gross sales of two-wheeler makers?
Even right this moment, regardless of an increase within the reputation of gearless scooters just like the Honda Activa, bikes proceed to dominate two-wheeler gross sales in India with a share of about 65%. Greater than half these bikes are bought within the rural markets, the place shoppers use them for every day commuting and for finishing up different financial actions.
2.What’s driving the expansion in two-wheeler gross sales in rural areas?
Pent-up demand, after shoppers postpone purchases the previous couple of years, is resulting in the spurt in demand. Additionally, inflation in rural areas has began moderating. The job market too has stabilised. Employees from rural areas are migrating again to cities and are sending again cash to their households in villages. All these have resulted in a rise in disposable incomes amongst rural shoppers and lots of of them are utilizing the cash to purchase two-wheelers.
The federal government has additionally taken a slew of measures forward of the final elections subsequent 12 months — 5 kg of free meals grains shall be doled out for an additional 5 years and LPG costs have been revised downwards, whilst diesel costs have remained steady — to satisfy the fundamental requirements of households in rural areas. With necessities taken care of, shoppers have now began making discretionary purchases. The paint and cement trade has already proven some restoration with individuals in rural markets mending and repairing their homes this festive season, indicating an total enchancment within the rural economic system. That is mirrored in two-wheeler demand as nicely.3.How has demand been for two-wheelers in rural markets this festive season?Market chief Hero MotoCorp, which has the widest main in addition to secondary distribution networks in small cities and cities, has seen rural gross sales develop 26% between Navratri and Bhai Dooj. In truth, most two-wheeler makers from Bajaj Auto to Honda Bike & Scooter India and TVS Motor have began seeing sturdy gross sales after many months with clients in these markets coming ahead to shut purchases in October and November.
4.What’s the outlook like for gross sales in rural markets?
Despite the fact that the principle festive season drew to an in depth final month, demand momentum is predicted to stay sturdy. The marriage season, which commenced on November 20, is supporting gross sales. Good realisation from the kharif harvest and excessive minimal help costs of crops will buoy demand in rural India, in line with trade watchers.
5.What are gross sales now and what’s the forecast?
The 2-wheeler trade reported double-digit progress of 17% in FY23, on a low base: to fifteen.86 million items from 13.57 million items within the 12 months earlier than.
Whereas gross sales already topped 10 million items within the first seven months (April-October) of the present fiscal 12 months, senior trade executives mentioned the turnaround in demand in rural markets will additional carry volumes going forward. Gross sales of bikes within the premium phase too are exhibiting sturdy progress (twice the speed of the general two-wheeler market), with younger city patrons buying these for leisure driving.
This fiscal 12 months, two-wheeler gross sales are projected to shut at round 18 million items. Primarily based on the present momentum out there, the trade is predicted to regain the sooner peak (21 million items of FY19) in one other two years.