India's two-wheeler industry is expected to record high single-digit growth during the festival season despite high base, TVS Motor's President for India Two-Wheeler Business Gaurav Gupta, as strong consumer demand and favourable economic conditions support sales.
The industry has maintained strong momentum so far this year, with the internal combustion engine (ICE) segment growing about 16% in August from a year earlier, while electric vehicle sales rose about 70%, Gupta said at the Conclave organised by Federation of Automobile Dealers Associations (FADA).
However, growth could moderate in the coming months as the industry faces a higher comparison base following the strong expansion seen in the run-up to August. “We may not see double digit growth as what we have seen in the months running up to the month of August but definitely high single digit growth should be expected to continue,” Gupta said.
Macro and Rural Demand Drivers
Gupta said several factors could support demand during the festival season, including the government's management of foreign exchange and interest rates.
While the monsoon had initially raised concerns, patchy rains has not yet affected the market significantly, he added. “The rains in the month of August the water in the reservoirs will be also spruced up from that aspect of the economy we should look at a promising front,” Gupta said.
Economic Tailwinds and New Launches to Sustain Momentum
New product launches, consumer sentiment and the harvest season could also help sustain the industry's momentum, he said.
Gupta said the industry could benefit from the broader economic momentum as it enters the key festival period, although growth may not match the double-digit levels seen in recent months.
“Crops, harvest will help the industry to continue the momentum and I look at it overall as a very very promising Next few months ahead,” he said.