An industry update from PhilipCapital shows that discounts in the two-wheeler segment are highly selective, while discounts for passenger cars are gradually decreasing.
The report added that rural demand picked up in the last week of Diwali as farmers received payments from mandis coinciding with the wedding season, further boosting sales.
“Looking at the strong momentum, two-wheeler growth is likely to outperform passenger cars for part of the year,” the report said.
Inventory levels remain low to moderate, reflecting robust wholesale market momentum in November.
The report suggests that retail optimism is likely to continue until mid-December, supported by strong festive demand. The holiday season also saw two notable trends: the upgrade among buyers and motorcycles outgrowing scooters in terms of demand. Small commercial vehicles have shown a strong recovery, while other commercial vehicle segments have shown only marginal growth. The sectoral update showed that the two-wheeler market witnessed strong festive growth led by Hero MotoCorp, TVS Motor and Royal Enfield, while Bajaj Auto lagged slightly behind.
According to our checks, Hero reported over 40 percent year-on-year growth, driven by its popular commuter and 125cc models, in addition to strong rural demand and wedding season momentum.
TVS achieved growth of around 35 percent, with motorcycles like Raider and Apache outperforming scooters.
Royal Enfield posted growth of 30-35 percent, mainly in sub-350cc models, supported by brand loyalty, premium upgrades and attractive financing.
Bajaj Auto’s performance remained modest with low double-digit growth as there were no new launches, no discounts, less A&P, and customer confusion due to multi-sub variants.
“Overall, very positive for the two-wheeler sector as the benefits of the GST cut are clearly visible due to low ticket prices compared to PVs, rural recovery and new launches being supportive,” PhilipCapital added.
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