The volume sales of two-wheelers are projected to experience a growth rate of 6-8% in the fiscal year 2024 compared to the previous year, but they are expected to remain lower than the pre-Covid levels of 24.46 million units recorded in FY19. Domestic growth is anticipated to be moderate, around 7-10%, while exports are likely to continue declining by approximately 3-5%.

  • Several significant challenges are impacting the demand for two-wheelers. These include a reduction in the FAME II subsidy, which restricts the growth of electric vehicle (EV) two-wheelers as the cost gap between internal combustion engine (ICE) and EV variants diminishes. Additionally, higher vehicle ownership costs, resulting from vehicle price hikes and increased interest rates, coupled with inflationary pressure, are affecting disposable income. Furthermore, the global recessionary trend is negatively impacting exports. An additional uncertainty to monitor is the adverse impact of El-Nino on rural consumer sentiment, which could further weaken demand.
  • It is expected that EV two-wheeler volume sales will surpass 1.5 million units in FY24, following significant volume growth at 215% in FY23 (primarily due to a lower base effect). However, the demand for EVs might experience a slowdown due to the reduction in the FAME II subsidy, which will decrease from the current 40% to 15% starting from June 1st, 2023, resulting in increased ownership costs.
  • Motorcycle sales are estimated to grow by 6-8%, particularly in the premium segment, while scooters are expected to achieve a growth rate of 4-5% in FY24.