A report by Jefferies, an investment banking and financial services company, forecasts that the volume of two-wheelers and tractors will grow at a compounded annual growth rate (CAGR) of 13-15% between 2025-27, outpacing passenger vehicles (PVs) and trucks. The report projects that 2Ws and tractors will grow at strong CAGRs of 13% and 15%, respectively, for 2025-27, with projections for FY25 being 12% and 6%, respectively. In contrast, PVs and trucks are expected to experience more modest growth, with CAGRs ranging from 5-8%. PVs are expected to grow at 8%, while trucks will see a growth rate of 5% during the same period.
The report also notes that two-wheelers and tractors are experiencing a recovery following the pandemic-related disruptions and regulatory challenges faced between 2021 and 2023, which had previously impacted demand for two-wheelers. In FY24, the two-wheelers wholesale volume rebounded strongly, growing by 14% YoY, surpassing PV growth, which remained at 8%. However, despite the recovery, two-wheeler volumes are still 13% below their FY19 peak. In comparison, PV volumes have risen 25% above pre-pandemic levels. Tractors are expected to grow significantly, with the sector poised for a cyclical recovery. Additionally, the report highlighted shifts in the PV market, with traditional leaders Maruti Suzuki and Hyundai losing market share. Mahindra & Mahindra is expected to overtake Hyundai as the second-largest original equipment manufacturer (OEM) in PVs by 2027. Electric vehicle (EV) adoption in two-wheelers remains slow, stagnating between 4-7% in recent years, but is projected to reach 10% by 2027.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.