While the overall consumption and investment demand is expected to remain subdued for an extended period, some growth off-shoots are visible in rural markets, it added. The rating agency noted that buoyed by healthy rabi yields, timely kharif sowing, progressive government support schemes and relatively lower COVID-19 impact, rural and semi-urban demand has enabled a sequential growth in sales since the unlocking in May 2020.
In addition, a shift towards personal mobility in urban areas continues to augur well for demand, it said. “In August and September, the industry recorded a 22 and 19 per cent sequential growth and a year on year 3 per cent and 12 per cent growth in wholesale volumes, respectively,” ICRA Vice President Shamsher Dewan said.
While inventory restocking before the forthcoming festive season kept the OEM (original equipment manufacturer) dispatches strong, the onset of Shraadh in mid-August, slowed down the retail volume growth, he added. Nonetheless, September witnessed a 13 per cent sequential growth in retail volumes, hinting towards a strong festive season off-take, dewan said.