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Two-wheelers saw strong double-digit growth (year-on-year) in the second quarter of this fiscal, while three-wheelers grew by high single-digits, as wholesale volume trends were mixed across segments, a report showed on Wednesday. 

The original equipment manufacturers (OEMs) reporting mixed revenue growth and margins in the July-September period, with 2Ws outperforming other segments.

“But we are still long-term positive on passenger vehicles (PVs) given the sectoral tailwinds and see the weakness in commercial vehicles (CVs) as a temporary hiccup as we find the sector entering a new upcycle phase,” according to the report by BNP Paribas India.

PV volume marginally declined and CV volume was also weak, likely hurt by the prolonged monsoon and slowdown in infrastructure activities, with low fleet utilisation.

HMSI (Honda Motorcycle) gained the most market share (retail) in 2Ws, while HMCL (Hero MotoCorp Ltd) lost the most in Q2 FY25. In PVs, Mahindra and Mahindra gained the most market share, while Maruti Suzuki India Ltd and Hyundai lost.

“We expect high single-digit to strong double-digit YoY revenue growth for 2Ws, and flat to high single-digit revenue decline for PVs (except for Mahindra) in Q2 FY25,” the report mentioned.

Management commentary on high levels of PV inventory, rising discounts and festive demand outlook would be key to watch out for.

“That said, given the weakening auto demand globally (and recent guidance cut by global peers), we now see a risk of Jaguar Land Rover (JLR) cutting its FY25 guidance, eventually pushing next-year’s guidance by a year,” the report noted.

According to the latest SIAM data, domestic sales of passenger vehicles stood at 3,15,689 in September, compared to 3,16,908 units in September last year.