1. The trend towards avoidance of public transportation after COVID 19 and digitization of used vehicle sales/purchases will lead to higher demand for used two-wheelers in India.
Even in the rural areas, where there are very few banks, customers have a lot of options to get loans. People living in rural areas, can access NBFC, which makes it convenient for such borrowers to purchase a pre-owned bike on EMI. In addition to this, EVs are going to be digitally connected, inclusive of safety features, location access etc. This might increase the tie ups which might lead to increase in down payments.
2. Emergence of female drivers expected to drive demand for scooters however, motorcycles, with their variety of models, continue to dominate the market
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Commuter bikes gives high mileage and has very low maintenance cost, thereby useful for day to day commuting. Majority population is the working middle class population, who prefer lower cost bikes for day to day travel. Moreover, Spending over basic necessities have reduced from nearly ~50% of total expenditure (FY’2010) to nearly ~30% (FY’2020) of total expenditure, thereby increasing discretionary spending in the hands of the people. Due to its higher fuel efficiency, commuter bikes are preferred by millions of drivers who are part of the E-Commerce and Hyperlocal Environment. Increase in demand for E-Commerce and Hyperlocal deliveries is expected to boost the demand and hence Commuter Bikes continue to dominate the Market.
3. The price of 2W, both new and used, is constantly rising, leading to a rise in demand for financing of used two-wheelers.
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Growing per capita incomes coupled with a continually increasing penchant for riding among India’s large youth population is pushing up the demand for premium bikes. Increased cost and lower affordability of used premium and sports two wheelers is acting as a catalyst for used two wheeler financing. Moreover, technological advancements in the form of a shift from combustion engine vehicle to electric vehicles, new product launches, high vehicle replacement rate are boosting the sales of used two wheelers across the country, thereby driving the two wheeler loan market.
Additionally, net banking has eliminated hassles associated with long approval processes, enabling online loans to be applied for and fewer documents to be required, leading to a positive impact on the market. Additionally, presence of major automakers in the country, flexibility in terms of tenure and payment mode, negotiable interest rates based on CIBIL score is further steering growth in India two wheeler loan market.
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