Two-wheeler sales are expected to grow during festive season despite the pandemic, aided by rural demand, as per an ICRA report.“While the overall consumption and investment demand is expected to remain subdued for an extended period, some growth offshoots are visible from rural markets,” it said.“Buoyed by healthy rabi yields, timely kharif sowing, progressive government support schemes and relatively lower COVID-19 impact, rural (and semi-urban) demand has enabled a sequential growth in sales since the unlocking in May 2020. A shift towards personal mobility in urban areas continues to augur well for demand,” it added.“While the urban markets continue to grapple with rising cases of COVID-19, the relatively less impacted rural and semi-urban markets (albeit facing increasing cases now) have enabled a sequential improvement in sales ever since, said Shamsher Dewan, vice-president, ICRA.“In August and September 2020, the industry recorded 22% and 19% sequential growth and a Y-o-Y 3% and 12% growth in wholesale volumes, respectively.”While uncertainty continues to persist regarding the time it would take for the pandemic to subside, ICRA continues to maintain a stable outlook for the two-wheeler industry. It is expected that a low base, upbeat rural sentiments, and increased preference for personal mobility would support retail two-wheeler demand in the festive season. However, despite the strong performance, the segment will see a volume contraction of 16-18% in FY21, ICRA added.
