Dear Reader,

The April sales numbers sustained the upbeat mood that has been prevailing among auto makers for nearly two years. Defying debates over the consumption slowdown in the country, auto companies have been outliers, clocking robust sales in two-wheeler (2W) and passenger vehicles (PVs).

However, FY2025 may well be the year of a strong comeback in 2Ws, which had for long lagged PVs. In fact, April 2W wholesales surprised with strong double-digit growth in domestic demand.

Take note of these numbers. Bajaj Auto’s domestic sales grew 19 per cent year-on-year (yoy), TVS Motor Company by 29 per cent and Hero MotoCorp by 33 per cent with the premium motorcycle maker Royal Enfield too posting a 9 per cent growth.

Supporting wholesale despatches from companies is the strong offtake at the retail level. Again, the robust growth in April 2W retail sales, which underscores actual customer offtake of vehicles, shot past that of PVs.

Dealers reckon that better-than-expected monthly sales come on the back of the wedding season and onset of harvest, both of which augur well for 2W demand, particularly in rural areas.

However, two-wheeler makers are confident that FY2025 would be a better year than FY2024. Rural demand is improving after a prolonged lull. Urban commuter demand is continuing on the back of preference for personal mobility and launch of new models and refreshers by companies to lure customers. Growth in both scooters and motorcycles is strong on a yoy and month-on-month basis.

But there are a few pain points that the segment has to deal with. One, 2W exports, especially the mass-market category, still remains a challenge. This is because the countries that Indian companies export too are still battling currency depreciation and inflation. Two, growth in electric vehicles has slowed considerably in April, perhaps with the reduction in subsidies and higher cost of ownership.

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All eyes are now on the monsoon, which is expected to be above normal. If so, the upbeat mood in two-wheelers should sustain as already mirrored in the rally in 2W stock prices. The narrative for now is that the upcycle in 2Ws is at its nascent stage.

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