Two-wheeler industry to grow 7-8% YoY in Q3, says TVS’ KN Radhakrishnan

India's two-wheeler industry is likely to grow 7-8% during the third quarter of the financial year 2024 on the back of robust demand expected during the peak festival season and support from good monsoon and reservoir level, according to TVS Motor Company Director and CEO KN Radhakrishnan.

The growth rate expectation shows a further moderation sequentially from 12.6% and 20.4% increase recorded in the second and first quarters, respectively. This is despite peaking festival season falling in the third quarter. There could be a high base impact as well because the industry sales jumped 22% in last year's third quarter.

"When we look at the third quarter, so far overall industry grew by 4%. During the Navrathri season, the industry grew by 10-11%. We are looking forward to the next week, including Dhanteras…You can expect a good rate of 7-8% kind in the industry," Radhakrishnan said today while speaking after announcing TVS Motor's second-quarter results.

Radhakrishnan noted that rural market demand, which accounts for a significant part of the two-wheeler industry sales, is looking good and is catching up with support from good monsoon and reservoir levels. "I am of the view that we can expect a reasonably good growth in the third quarter. I am hoping that rural will try to be in line with urban this year," he said.

The two-wheeler makers dispatched a total of 47.31 lakh units to the domestic market in the third quarter of last year, representing a growth of around 22% on year. During the second quarter of this year, the domestic two-wheeler market dispatches rose 12.6% on year to 51.79 lakh units.

Meanwhile, Bajaj Auto's Executive Director Rakesh Sharma recently said the peak festival season, which runs from October to November, would see sales growth of just 3%-5% on year, well below industry expectations of at least 8%.

Festival season in India generally starts with Ganesh Chaturthi or Onam in Kerala towards the August end or September beginning and extends till Bhai Dooj after Diwali in November across the majority of the states. The period from Navratri to Diwali is considered the peak festival season.

This period is of great significance to automakers as consumers generally make big-ticket purchases during this time due to cultural significance. The volumes generated in this period account for a significant part of their annual sales.

Bajaj Auto has also revised the two-wheeler industry’s growth estimate for the financial year 2025 to around 5% from its earlier guidance of 5-8%. This reflects the lower-than-anticipated growth in volume during the ongoing festival season and the weakness in demand for entry-level motorcycles.