Increasing income levels in the light of buoyant economic outlook would drive domestic two-wheeler sales going ahead. The domestic two-wheeler sales is set to cross 13.4 million units by 2013-14 from the FY10 level of 9.4 million units, witnessing a CAGR of 9.7%, according to a latest report of CARE Research. The growth would come primarily from the rural areas, where the penetration level is abysmally low in relation to the income levels.
According to the research, nearly 65% of populace affording two-wheelers in urban areas, where the average per capita income (PCI) is around Rs 53,000, already own it. However, in case of rural areas, where the average PCI is Rs 35,000, only 22% of the affording populace owns a two-wheeler. Thus, the drastically lower penetration in rural areas cannot be solely attributed to lower PCI compared to urban areas. Supply side constraints too have a role in lower penetration in rural areas.
In terms of vehicle type, it is expected gearless scooter sales to increase at a faster rate than the motorcycles. It is forecasted that gearless scooter sales to grow at a CAGR of 12% – 13% in next four to five years.
