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India two wheeler industry posts double digit growth – ICRA

Auto News - Published on Fri, 12 Oct 2018

Image Source: SteelGuru
Economic Times reported that continuing its double digit growth from last fiscal, two wheeler industry grew 11.5 % in first five months of this financial year even though scooter sales were moderated primarily due to Kerala floods in August. As per a report by ICRA, the motorcycle segment led the growth during this period with 14.7 % (Y-o-Y increase in volumes), followed by scooters and mopeds at 6.8 % and 2.8 %, respectively. The overall growth of industry was affected, specially during the first two months of second quarter after witnessing transport strike in July, regulatory changes mandating sale to only valid license holders in West Bengal and Kerala floods in August.

Ms Anupama Arora, Vice President and Sector Head, ICRA said that “We expect the two-wheeler industry volumes to grow at 8-10% during FY2019 led by continued recovery in the larger motorcycle segment, even as scooter segment may pick-up pace after a modest run in 5MFY2019. The demand for motorcycles has been driven by buoyant rural sentiments that were supported by normal monsoon precipitation of previous two fiscals and increase in MSPs even as the current monsoon season has ended below normal (91% of long period average). Concurrently, new product launches targeting niche clientele, increasing urbanization and rising disposable income leading to greater penetration in non-urban areas will support the growth in scooter demand.”

Entry level motorcycle segment demand propped up industry growth by 19 % from April to August 2018. According to the report, this segment is most susceptible to the improvement in rural demand sentiment, which has been buoyant due to normal monsoons in previous two fiscals.

Scooter sales were moderated as external factors from Kerala and West Bangal impacted the demand. However, the demand is expected to increase with scheduled product launched during the festive season and increased rural penetration.

Ms Arora added that "On the international front, recovery in oil prices and exchange rates for established export destinations (Africa and Latin America) and increasing penetration of OEMs in newly explored geographies is expected to support volume growth in the current fiscal.”

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Posted By : Joykumar Irom on Fri, 12 Oct 2018
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