Credit Analysis and Research (CARE Ratings) says that the rural India will be the next growth frontier for the Indian two-wheeler industry. 

Domestic two-wheeler sales have grown to around 11.3 million by financial year 2014 from 7.4 million in financial year 2009 is also projected by the credit rating agency’s research arm. 

“The two-wheeler penetration in rural area is at 211 per thousand, as compared with 644 per thousand in urban areas. That leaves plenty of scope for two-wheeler companies such as Hero Honda, Bajaj Auto, TVS and Honda Motorcycle and Scooter India to expand their footprint there,” says the deputy managing director of CARE Ratings, D R Dogra. 

In the FY09 a modest annual growth of 2.6% is seen by the domestic two-wheeler industry. Even though a very depressive monsoon is foreseen, still the sales are expected to grow at a faster rate by industry this year as the financing availability is expected to become easier. Revati Kasture, head, CARE Research says that, “Two-wheeler sales are forecast to grow by 6.7 per cent in 2009-10 to 7.9 million units from 7.4 million in 2008-09”. 

“Positive factors such as the excise duty cut, lower fuel prices and lower interest rates and easing liquidity situation have helped the two-wheeler companies to improve their sales in urban and rural areas in the present financial year.

In this background, given already high penetration in urban markets, rural India offers big opportunity to the industry.” 

The rating agency’s study also reveals that the growing numbers of working women have also gradually emerged as a large consumer segment, especially for gearless scooterettes. Around 30 per cent of the women in India are earning an independent income, as against 22 per cent in 1990-91 is estimated by CARE. 

The report says, with the women also joining the workforce, the disposable income of households increased. Better affordability is thus playing a key role in boosting two-wheeler demand.

Kasture said, “Rural customers look for sturdiness and high mileage as critical factors that influence their buying decision. Therefore, motorcycles with engine capacity of 75-125 cc have a high demand in these markets”.

Related News:
Bajaj Auto rolls out upgraded version of Pulsar 220 cc
TVS plans to roll out ‘Flame’s advanced version
Lohia Auto targets to sell 10,000 e-bikes this year
India’s ‘fastest’ bike by Bajaj Auto to hit the roads

Related Books:
Honda CRF250/450 Motocross & Off-Road Bikes Owners Workshop Manual
The Motorcycle Book: Everything You Need to Know about Owning, Enjoying and Maintaining Your Bike
5pk Ell Rdr All about Bikes G2 Stry 08

Add a comment

Posted by Naresh Koshti on 27 June, 2009 2:22:07 PM IST #