Indian Automotive Industry : Divergent Trends in Four-Wheelers and Two-Wheelers

The Indian automotive sector's performance from 2018 to 2024 showcases a complex and evolving landscape, with distinct recovery patterns for the two-wheeler (2W) and four-wheeler (4W) markets. Here’s a detailed breakdown:

Pre-Pandemic Peak (2018) : Best Year

Both the 2W and 4W industries reached their peak sales in 2018, driven by moderate economic growth and favorable consumer sentiment.

Pandemic Impact (2020) : Sharp Decline

The pandemic led to a significant downturn in automotive sales across both segments, with the 2W market experiencing a more pronounced initial drop.

Recovery Trajectories

§  Post-2020, the automotive sector experienced a K-shaped recovery.

§  4W Market: Exhibited a V-shaped recovery. After a steep decline in 2020, the segment rebounded quickly, driven by pent-up demand. By 2024, the 4W market achieved new heights but has seen growth moderation recently.

§  2W Market: Saw a protracted and uneven recovery. The segment struggled to bounce back quickly, and it has only recently returned to pre-pandemic sales levels from 2019.

2024 Performance

In 2024, the 2W industry grew by 21%, and the 4W industry growth rate moderated to 6%. 2W has been growing rapidly back throughout 2024, harsh summer notwithstanding. However, the 4W industry growth rate has turned downward in recent months due to changes in consumer sentiment. This also reflects the economic inequality effect that the Indian economy has, thus separating growth drivers for the 4W and 2W markets.