Indian Two-Wheeler Industry Records 22% Growth in September Fueled by Rising Rural Consumption

India's two-wheeler (2W) sector, led by the surge in rural consumption, grew 22 percent year-on-year in September, a report said on Thursday. Growth in three-wheelers (3W) was at eight per cent and tractors at three per cent, according to the BNP Paribas (EPA:BNPP) India report.
The OEMs still seem hopeful of increased festive season demand, whereas the retail demand seems mixed.

However, tractor sales have shown consistent YoY growth and, given a supportive base in the second half, "we see an upside risk to our FY25 mid-single-digit volume growth expectations," the report added.

PVs were fairly flat in sales volume. In fact, if one was to look at the retail weakness, PV OEMs have been cutting their dispatches just to get a grip on the high inventory, and therefore, "we did not see a sharp inventory build-up ahead of the start of the festive season.".

According to reports, now it is noted that credit is driving 62 percent of two-wheeler purchases in rural India, while against this, in the urban India, 58 percent of two-wheeler purchases are through credit. There have been meteoric rises in credit-driven consumption in small cities and towns because of the Pradhan Mantri Jan Dhan Yojana (PMJDY).

More than 53 crore bank accounts have been opened under PMJDY, bringing millions of rural Indians into the formal financial system for the first time.

From the sales of two-wheelers to fast-moving consumer goods (FMCGs), the overall consumption is surging in rural India. According to a recent report, 60% of households having an annual income of over Rs 5 lakh are in the top 20 percent, or 150, districts of the country.

Meanwhile, the cumulative electric vehicle registrations have increased to 1.59 lakh units in September from 1.29 lakh units during the same period the previous year.

Electric two-wheeler sales stood at 0.90 lakh units, up from 0.64 lakh units during the same period the previous year. The electric three wheeler segment has witnessed 0.63 lakh units sales as compared to 0.58 lakh units during September last year, according to the data.