Bajaj Auto sees India 2W industry volume growing 8-10% YoY in FY24

Bajaj Auto Ltd expects domestic two-wheeler industry volume to grow 8-10% on a year-on-year basis during the current financial year with growth across all segments. The growth rate is likely to be higher in the premium segment, given the premiumisation trend.

“We feel the industry should grow by 8-10% with the top half of the industry growing faster than the bottom half, let us say by 2-3 percentage points difference,” Bajaj Auto Executive Director Rakesh Sharma told reporters in a post-earnings call.

Sharma noted that there has been growth in every motorcycle segment. “The growth rates are doing well as we go up the pyramid. The least growth has been in the 100cc, 110cc have posted higher single-digit growth, but the 125cc + segment has growth in mid-teens,” he said.

Though the industry sales remain below the all-time high of 2018-2019, two-wheeler sales have been robust in 2023. Better disposable income, infrastructure, recovery from pandemic worries, favourable weather conditions, and e-commerce activity in have lifted rural sentiments.

Demand momentum for two-wheelers, which has been sluggish for some time, came back during the festival season. Automobile retail sales during the 42-day festival period were at an all-time high with two-wheeler growth outpacing the passenger vehicle segment.

Sharma noted that sales usually come down after the festival period, but this year the rate of decline has been lower, compared to previous years. “Not only every segment is growing, it did not fall off too much in December, but also for us at least both urban and rural are doing reasonably well,” he added.

India’s largest two-wheeler maker Hero MotoCorp also recently said they are seeing green shoots in the industry and the urban-rural demand split for two-wheelers, which was more in favour of urban in the last few years, has sort of evened out during this festival season with rural demand picking up.

As per the data from the Society of Automobile Manufacturers Association, domestic two-wheeler sales in 2022-23 were at 1.59 crore units, up 17% from the year before that.