“We have seen almost a 20-30% increase in financing penetration in a short period, and now the industry is readjusting,” he said.
While two-wheelers continue to struggle, the passenger vehicle (PV) segment is showing signs of stability. The market went through a “perfect storm” in 2023-24 (FY24) as pent-up demand faded and affordability declined.
However, these challenges are now easing. “Affordability, which we track monthly, has started stabilising over the past year,” Rakesh said, indicating that PV sales could recover in 2025-26 (FY26).
Also Read: Bajaj Auto ED on how e-commerce is influencing buying patterns and salesRural demand trends show a stark contrast. Tractor sales are booming, while two-wheeler demand remains weak. Tractor buyers benefit from strong farm income growth, whereas two-wheeler customers are more diverse and include non-farm workers who face economic pressures.
Also Read: Tesla faces uphill battle in India’s price-conscious market, says auto expert
Rakesh prefers passenger vehicle manufacturers over two-wheeler companies. His top recommendations include Maruti Suzuki, which is anticipated to benefit from hybrid vehicle launches in the second half of FY26; Mahindra and Mahindra, which is experiencing strong growth in both sports utility vehicles (SUVs) and tractors, with potential for margin expansion; and Ashok Leyland, which is well-positioned for a cyclical recovery as freight activity shows improvement.
For the entire interview, watch the accompanying video
Catch all the latest updates from the stock market here
(Edited by : Shweta Mungre)
First Published: Mar 17, 2025 11:52 am IS
