In the last financial year of 2024, the volume growth of the industry was recorded at 9.8 per cent.
The report added that the growth in FY25 is expected to be driven by higher Electric Vehicle (EV) sales supported by the Electric Mobility Promotion Scheme 2024, the expectation of interest rate cuts in the second half of FY25, and strong demand for new model launches.
The Indian two-wheelers industry reached its peak sales volume recorded in FY19 when annual sales volume had reached 24.46 million units. While the total sales volume in FY24 stood at 21.43 million units.
The report further said that the recovery in exports from its low base of FY24, and favourable monsoon which is likely to improve rural consumer sentiment and income levels will play a vital role in the overall growth.
The volume growth in the last financial year was driven by factors such as traction in EV volumes, a wider range of models, and new launches.
In the first half of FY24, demand plunged due to the increase in vehicle prices post the implementation of phase II of the BS-VI emission norms, higher interest rates, and stressed rural incomes.
However, the sales revived in the second half on the back of festive season demand and an uptick in rural sentiments. The industry witnessed sales growing in double-digits in each of the two quarters that ended March 2024 quarter (y-o-y basis). This double-digit volume growth on a y-o-y basis continued during the months of April and May 2024 as well.
Interestingly, during FY24, the domestic two-wheeler industry witnessed a total sales volume of 17.97 million units, reflecting a growth rate of 13 per cent, while the export volume experienced a decline of 5 per cent though recovered from FY23.
Citing the factors responsible for the declining sales, the report underscored that stress in African markets which traditionally accounted for a significant portion of India’s two-wheeler exports played a significant role in the decreased sales.