Motorcycle and scooter sales in India likely grew in double-digits in the financial year 2023-24, crossing pre-Covid levels, buoyed by sustained revival in demand in both urban and rural markets.
Industry estimates show domestic two-wheeler sales rose about 13% to 18.4-18.5 million units in FY24. Petrol-powered models comprised more than 95% of the total sales at about 17.5 million units.
Two-wheeler makers are estimated to have additionally dispatched about a million electric vehicles – a record for a year. Retail sales of electric two-wheelers are expected to touch 900,000-950,000 units by March 31.
Several senior industry executives ET spoke to are optimistic of the momentum sustaining in the new financial year backed by improving macroeconomic scenario, normal monsoons, expected rate cuts by the central bank, and revival in replacement demand.
About 15.86 million petrol two-wheelers and 700,000 electric two-wheelers were sold in FY23. Two-wheeler sales stood at 17.4 million units around the onset of the pandemic in FY20, before peaking at 21 million units in FY19.
Two-wheeler makers from Hero MotoCorp to Honda Motorcycle & Scooter India (HMSI) and Bajaj Auto are seeing early signs of revival in demand for entry-level motorcycles which started with the festivals and sustained through the wedding season in northern parts of the country, especially in rural areas, which account for about 55% of all two-wheelers sold in the country. Demand, meanwhile, is strong for more premium vehicles in urban centres driven by a pick-up in economic activity.
Sales of premium motorcycles with 125-150cc engine capacity grew by 15% while growing by 22% for 150-250cc models and 19% for more than 250cc models in the first 11 months of FY24, showed data from Society of Indian Automobile Manufacturers (SIAM). These three categories together accounted for a little over half of the 16.5 million motorcycles sold in the country during the period. Sales of commuter motorcycles (less than 125 cc) grew by 9% between April-February FY24.
“India is a story of many Indias and while the bottom of the pyramid is slowly coming back to consumption and spending, the middle class/upper middle class is spending like never before. This has led to a surge in the growth of the premium segment, which has been growing at more than 20% per annum recently,” Niranjan Gupta, chief executive officer at the country’s largest two-wheeler maker Hero MotoCorp said in a recent interview.
Noting the uptick in domestic consumption, a senior executive at a leading two-wheeler maker said, “Unlike in other countries, all economic indicators are looking positive in India. Consumer confidence is returning, finance penetration is going up, and all these factors are helping drive up sales.”
Hemal N Thakkar, senior practice leader and director, Crisil Market Intelligence & Analytics expects companies to scale new records in 1-2 years. “We expect the momentum to continue getting into FY25 also with the ICE (internal combustion engine) industry crossing almost 18.5 million units and e2Ws reaching sales of 1.5 million units, taking the domestic industry to almost 9% growth for the year,” Thakkar said. He said sales may exceed the forecast considering improving macro conditions, normal rains, expected rate cuts and pick-up in replacement demand.
New model launches are additionally expected to help drive demand momentum going forward in FY25. Bajaj Auto has scheduled for launch a bigger Pulsar motorcycle model in the new fiscal. “It’s a non-stop mania (launches) as our team is calling it. And nothing like new products and upgrades to excite the upper half of the industry,” Rajesh Sharma, executive director said in the latest earnings call.
