Is rural India wheeling its way out of demand depression?
Rural India has not been marching in step with the overall economy. The disparity grew during the pandemic when the rural demand was badly hit and poor weather later depressed it further.
But an important indicator has revealed an uptick in rural demand. Motorcycle and scooter sales in India, a significant proxy for demand in rural areas, likely grew in double-digits in the financial year 2023-24, crossing pre-Covid levels, buoyed by sustained revival in demand in urban as well as rural markets.
Also Read: India's motorcycle and scooter sales likely crossed pre-Covid levels in FY 23-24
Industry estimates show, ET has reported, domestic two-wheeler sales rose about 13% to 18.4-18.5 million units in FY24. Petrol-powered models comprised more than 95% of the total sales at about 17.5 million units. Rural India accounts for more than 50% of the overall two-wheeler sales. Two-wheeler makers from Hero MotoCorp to Honda Motorcycle & Scooter India (HMSI) and Bajaj Auto are seeing early signs of revival in demand for entry-level motorcycles which started with the festivals and sustained through the wedding season in northern parts of the country, especially in rural areas.
Vehicle registrations — a proxy for retail sales — increased in healthy double-digits by 13% Y-o-Y to over two million units in February amid better supplies and sustained consumer demand across rural and urban markets, as per data collated by FADA (Federation of Automobile Dealers Association).
FMCG industry sales, to which rural India contributes
