New Delhi, Oct 3 (IANS): Driven by rising rural consumption, the two-wheeler (2W) industry in India saw 22 per cent growth (year-on-year) in the month of September, according to a report on Thursday.

Three-wheelers (3W) saw eight per cent growth while tractors witnessed three per cent, as per the report by BNP Paribas India.

While retail demand appears mixed, original equipment manufacturers (OEMs) are hopeful of a strong festive season demand.

Tractor sales continue to show steady growth YoY, and with a favourable base in the second half, “we see an upside risk to our FY25 mid-single digit volume growth expectations”, the report mentioned.

Passenger vehicle (PV) sales volume was largely flat. Looking at the retail weakness, PV OEMs have been cutting their dispatches to tackle the high inventory, and hence, “we did not see a sharp inventory build-up ahead of the start of the festive season”.

Reports mention that 62 per cent of two-wheeler purchases in rural India are now driven by credit, crossing urban figures at 58 per cent. There has been a meteoric rise in credit-driven consumption in small cities and towns due to the Pradhan Mantri Jan Dhan Yojana (PMJDY).

More than 53 crore bank accounts have been opened under PMJDY, bringing millions of rural Indians into the formal financial system for the first time.

From two-wheeler sales to fast-moving consumer goods (FMCGs), the overall consumption is surging in rural India. A report revealed recently that 60 per cent of households with annual income above Rs 5 lakh are in the top 20 per cent (150) districts in the country.

Meanwhile, the total EV registrations reached 1.59 lakh units in September — up from 1.29 lakh units in the same month last year.

Electric two-wheeler sales were 0.90 lakh units, a rise from 0.64 lakh units in the same month last year. The electric three-wheeler segment saw 0.63 lakh unit sales, compared with 0.58 lakh units in September 2023, as per the data.