Is the 2-wheeler segment in India experiencing strong growth due to exports and domestic recovery?
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Synopsis
India's automobile sector is witnessing a dynamic shift with a 2.8% YoY growth in August retail sales, primarily driven by the thriving two-wheeler segment. This growth is bolstered by robust exports and a rebound in domestic demand, setting an optimistic tone heading into the festive season. Explore the factors fueling this remarkable trend.
Key Takeaways
- 2.8% year-on-year growth in India's automobile sector.
- Two-wheeler sales driven by exports and festive season preparations.
- Passenger vehicles saw a 0.8% increase in sales.
- Commercial vehicle sales up by 8.0%.
- Government plans to reduce tax on vehicles to 18%.
New Delhi, Sep 3 (NationPress) The Indian automobile sector recorded a 2.8% year-on-year growth in retail sales during August, highlighted by impressive results in the two-wheeler category, according to a report released on Wednesday.
Manufacturers in the two-wheeler industry saw a 2.1% boost in sales, largely driven by exports and preparations for the festive season as dealers stocked up their inventories, as stated in a report from Choice Institutional Equities.
Sales of passenger vehicles experienced a slight uptick of 0.8%, with strong demand particularly noted in the SUV segment. However, the three-wheeler market faced a 2.3% decline year-on-year as consumers gravitated towards electric vehicle options.
Eicher Motors exhibited a remarkable 54.8% year-on-year increase in two-wheeler sales, while TVS Motor Company recorded a 30.1% rise, fueled by a surge in demand for premium motorcycles.
Hero MotoCorp reported an 8.1% increase, attributed to recovery in rural markets, whereas Bajaj Auto noted a 5.0% growth, supported by a 28.6% increase in sales.
The sales of passenger vehicles in the domestic market slowed down as dealers maintained low inventories in anticipation of changes in GST rates. The report also indicated an increase in CNG adoption in this segment.
Mahindra & Mahindra observed a 9% decline in domestic dispatches year-over-year. Meanwhile, Maruti Suzuki witnessed a slight 0.6% drop but was bolstered by robust export performance.
Sales of commercial vehicles rose by 8.0%, while tractor sales surged 29.7% thanks to strong rural demand. The report noted that CV inventory, particularly from Ashok Leyland, has decreased, alleviating pressure on dealers following a sluggish year.
The government is anticipated to reduce taxes on entry-level passenger vehicles and two-wheelers to 18%, enhancing affordability just ahead of Diwali.
At present, all combustion engine-based passenger vehicles are subjected to a GST of 28% plus a compensation cess ranging from 1% to 22% depending on engine size, length, and body type.
Point of View
I am witnessing a transformative phase in India's automobile industry. The growth in the two-wheeler segment signifies not just economic recovery but also a shift in consumer behavior towards mobility solutions. This trend reflects an optimistic outlook for the industry, with potential long-term benefits for manufacturers and consumers alike. We must continue to support these developments to ensure a sustainable future.
NationPress
03/09/2025
Frequently Asked Questions
What is the growth percentage of India's automobile sector in August?
India's automobile sector recorded a 2.8% year-on-year growth in retail sales in August.
Which segment saw significant growth in sales?
The two-wheeler segment experienced a 2.1% increase in sales, driven by exports and festive season preparations.
How did passenger vehicle sales perform?
Passenger vehicle sales improved marginally by 0.8%, mainly due to strong demand for SUVs.
What is the expected tax reduction for vehicles?
The government is expected to lower the tax on entry-level passenger vehicles and two-wheelers to 18%.
How did commercial vehicle sales fare?
Commercial vehicle sales increased by 8.0%, indicating a positive trend in this segment.
