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Sustainability of domestic demand in 2-wheeler to remain contingent: ICRA

Ratings agency ICRA on Monday said it expects that the sustainability of domestic demand in two-wheeler would remain contingent upon the COVID-19 scenario following the festive season

Two wheelers

Ratings agency ICRA on Monday said it expects that the sustainability of domestic demand in two-wheeler would remain contingent upon the COVID-19 scenario following the festive season.

October marked the beginning of the auspicious festive season in India and the pace of inventory restocking by original equipment manufacturers (OEMs) reached its peak, ICRA Vice-President Shamsher Dewan said in a statement.

Even as dealers remain cautiously optimistic about retail sales going into the festive season, the listed OEMs reported a 24 per cent year-on-year increase in their domestic sales volumes in October 2020, he said.

"This indicates optimism regarding consumer sentiments, especially those in rural and semi-urban markets and continued preference for 2-wheelers as a personal mobility solution in urban areas," Dewan said.

On the export front, the listed OEMs reported a 32 per cent year-on-year improvement in dispatches in the previous month, he said adding that it indicates that the key export markets are also shaking-off the pandemic blues.