Two-wheelers are picking up, but will it last?

livemint.com:

NEW DELHI : Two-wheeler sales are speeding again. At least that’s what production data and retail sales in the festive months of September, October and November show. Does it mean the segment, hurt by income disruptions during covid, is back on its feet? Mint explains.

In November, registrations of new two-wheelers in India clocked a record 2.25 million units, surpassing a record previously set in March 2020 by 177,000 vehicles. This is the first time after the BS-VI changeover and the pandemic-related lockdowns that two-wheeler retails have surpassed a pre-covid sales record, especially in a festive month, while passenger vehicle sales have been setting new records every month this year. New launches and a growing sense of affluence in the middle class have caused the Indian passenger market to remain resilient, but the two-wheeler market has been witnessing decadal low volumes.

The change of sentiment in two-wheeler buying started to reflect in higher production levels towards the end of the second quarter this fiscal, as companies started to ramp up manufacturing ahead of the festive season. Thanks partly to the low base of last year, wholesale dispatches of two-wheelers were 20% and 31% higher in October and November, respectively, compared to 2022 levels. For the September-November period combined, retail sales were 9% higher.

For the fiscal year till November, two-wheeler wholesales emerged from flat sales to a nearly 10% growth so far. The two-wheeler segment is in an upcycle after two years of weak sales, which industry experts expect will play out for at least two more quarters. As the market gets used to higher prices, appetite for entry-level purchases is improving.