'Two-wheeler industry limping back to normalcy post note ban'

'Two-wheeler industry limping back to normalcy post note ban'

 The impact of demonetisation appears to have moderated with the two-wheeler industry limping back to normalcy as reflected by smaller volume contraction in January 2017, and expectations of a flattish February and March 2017, according to rating agency ICRA.

“Among the various product segments, mopeds have remained relatively insulated from the negative effects of the note ban, and have continued to maintain their double-digit growth momentum, albeit on a low base, closing January 2017 with year to date (YTD) growth of 26.8%. Scooters, while continuing to outpace the industry growth, reported YTD growth of 12.5%, although it was much lower than the 24.7% reported till September 2016,” ICRA stated.

“Motorcycles, which had been on the path of revival from the de-growth and flat sales reported since FY2013, again returned to low growth levels of 5.1% in the aftermath of demonetisation,” ICRA added.

“Our channel checks with dealers indicate the situation is moving back to normal. We expect that some deferment of purchases during Q3 and Q4 FY2017 to result in improvement in volumes during FY2018, leading to 8-10% growth during the year. While the gap in growth rates will narrow, scooters would continue to outpace motorcycles in volume growth during FY2018,” ICRA Ratings’ Subrata Ray said.


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