Two-wheeler retail sales are expected to increase by just 4-7% in volume terms in the domestic market this fiscal year despite logging strong growth in the festive period, according to a report.

The festive season this year saw robust growth in two-wheeler retails aided by the upcoming wedding season and some recovery in rural demand, which supported sales growth in the entry-level (110 cc) segment, the report by rating firm ICRA stated.

The dealer inventory remained at near normal levels, with the OEMs (original equipment manufacturers) wary of a build-up in inventory at the dealerships, it added.

“The industry is expected to record a moderate growth in volumes in FY 2024 (4-7%) even as export volumes remain impacted by weak demand,” ICRA said.

Elaborating on the passenger vehicles, ICRA stated that the segment is expected to record a moderate growth in volumes in FY2024 (6-9%) and reach an all-time high during the period.

Commercial vehicle volume growth is expected to be in the range of 2-4% this fiscal as compared with the last financial year, it stated.

“Aided by favourable demand drivers, the industry volumes are expected to reach near the pre-pandemic peak,” ICRA said.