Domestic two-wheeler (2W) volume is expected to shrink by 1-4 per cent year-on-year this fiscal, impacted by relentless increase in 2W prices as well as record high petrol cost, among others, credit ratings agency ICRA has said.

Further, ICRA said that the lacklustre festive season performance also highlights the continued wariness among the low-income population regarding big-ticket purchases.

ICRA Ratings expects domestic two-wheeler volumes to contract by 1-4 per cent YoY in FY2022, following a weak festive season performance for the industry.

Also, the sales of 8.05 million two-wheelers in the domestic market in April-October period of FY2022 are flattish on a YoY basis despite a severely contracted base, it stated.

The relentless increase in 2W prices during the year and record-high petrol rates have kept consumers away from dealerships, according to the credit ratings agency.