MUMBAI: The growth in retail passenger vehicles and two- wheelers in underpenetrated states have outperformed the industry growth over the last few years.
Due to low penetration, Bihar, West Bengal and UP have outpaced the industry growth by growing at a CAGR of 21.8 per cent, 17.8 per cent and 10.7 per cent, respectively over FY2005-18 against the overall growth rate of 9.5 per cent in the two-wheeler segment. Similarly, the passenger vehicles (PV) sales growth in these states grew at a CAGR of 20.4 per cent, 14 per cent and 16 per cent respectively against the overall growth rate of 10.1 per cent during the same period.
According to a report of Kotak Securities, the PV segment has low penetration in most of the states in India, whereas the two-wheeler segment has high penetration levels across most Indian states.
“Despite having high levels of penetration, the two-wheeler industry has grown at par with the PV industry. We believe that due to the challenges posed by infrastructural constraints, consumer preferences have shifted towards purchasing a two-wheeler over a PV as their second vehicle of preference. The growth is also driven by increasing penetration of scooter, which is more flexible and comfortable for everyone including the female population,” the report said.
