 "2-wheeler volumes to contract 16-18% this fiscal due to Covid-19: ICRA")
Rating agency ICRA on Wednesday said it expects 16-18 per cent contraction in two wheeler volumes in the current fiscal.
"ICRA continues to maintain its expectation of 16-18 per cent year on year contraction in two-wheeler volumes in FY2021, amid an evolving COVID-19 situation and economic uncertainties," the rating agency said in a statement.
While the overall consumption and investment demand is expected to remain subdued for an extended period, some growth off-shoots are visible in rural markets, it added.
The rating agency noted that buoyed by healthy rabi yields, timely kharif sowing, progressive government support schemes and relatively lower COVID-19 impact, rural and semi-urban demand has enabled a sequential growth in sales since the unlocking in May 2020.
In addition, a shift towards personal mobility in urban areas continues to augur well for demand, it said.
"In August and September, the industry recorded a 22 and 19 per cent sequential growth and a year on year 3 per cent and 12 per cent growth in wholesale volumes, respectively," ICRA Vice President Shamsher Dewan said.
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While inventory restocking before the forthcoming festive season kept the OEM (original equipment manufacturer) dispatches strong, the onset of Shraadh in mid-August, slowed down the retail volume growth, he added.
Nonetheless, September witnessed a 13 per cent sequential growth in retail volumes, hinting towards a strong festive season off-take, dewan said.