Growth is expected to increase due to increased queries (presentation image)
The Indian automobile market is set to witness a significant growth of over 15 per cent during the upcoming festive season, particularly in the two-wheeler (2W) segment, according to a research report by Nuvama Wealth Investment Limited. The growth is anticipated due to rising enquiries and recovery in rural demand, which accounts for over 55 per cent of the two-wheeler market.
Enquiries for passenger vehicles have also increased, and the PV vehicle segment is also likely to be on the up in rural areas. According to the report, the push is likely to benefit mass-market original equipment manufacturers (OEMs) such as TVS Motors, Hero MotoCorp and Bajaj Auto, as opposed to premium OEMs such as Eicher Motors, which makes Royal Enfield (RE) motorcycles. New models, including TVS Jupiter and Hero Xtreme 125R, are expected to support 2W sales growth.
In the PV segment, rural demand accounts for over 35 per cent of the market share, with growth expected to be in the single digits during the festive season. Utility Vehicle (UV) sales are likely to register double-digit growth, outpacing those of hatchbacks. This trend will benefit manufacturers such as Mahindra & Mahindra and Tata Motors over Maruti Suzuki, with new models such as the Mahindra Thar Roxx and Tata Currv expected to attract customers, the report said.
The report suggests that mass market players are expected to perform better, but premium segments may face more subdued growth. In anticipation of strong festive demand, distributors have increased 2W and PV inventories by up to 1.5 to 2.5 months. The report says the increased inventory build-up suggests confidence among manufacturers and distributors alike, who expect a surge in sales during the festive period.
Commercial vehicle Sales of medium and heavy commercial vehicles are likely to grow at a moderate pace, with demand for medium and heavy commercial vehicles projected to increase in the single digits. This growth will be driven by replacement demand as cargo availability continues to improve across the country.
Tractors are expected to perform well during the financial years 2024-26, with volume growth likely in the high single digits. Looking ahead, the report adds that the long-term outlook for the tractor and 2W segments remains strong.
Historical data suggests that the sales cycle, which typically lasts between two and four years, could peak in the coming years, which would favour higher volume growth for tractors and two-wheelers compared to two-wheelers and commercial vehicles. The report forecasts high single-digit volume growth for tractors and two-wheelers during FY24-26E, while two-wheelers and commercial vehicles are likely to grow in the low single digits.
(The story has been obtained from a media outlet and remains unedited by Times Now)
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