2024 Lok Sabha election spending sparks sales of entry-level 2-wheelers, home appliances

As the 2024 Lok Sabha election nears its end, some interesting consumption trends are becoming apparent. For instance, the uptick in demand for entry-level two-wheelers and home appliances that had no takers even a few months ago.

Entry-level two-wheelers, up to 125cc engine capacity, have recorded subdued demand for many months till late 2023. However, demand for cheaper two-wheeler models priced up to Rs 1,00,000 (ex-showroom) spiked in April, coinciding with the beginning of the Lok Sabha elections.

Manish Raj Singhania, President of Federation of Automobile Dealers Associations of India (FADA), said two-wheeler sales at the dealer level recorded a 33 percent year-on-year (YoY) growth during April. “In the two-wheeler market, we are witnessing an uptick in demand for up to 125CC models. In the last month (April 2024), sales of two-wheelers surged by 33 percent YoY,” he told Business Today.

Singhania said that while the sales of premium two-wheelers have been growing since the pandemic-related disruptions waned, the industry was worried over the lacklustre demand in the entry-level segment.

Industry experts said that spending by the political outfits during major elections has traditionally lifted sales of two-wheelers and home appliances. “Government dole outs and political spending during the elections rise sharply, providing cash in the hands of low-income households. This is aiding sales of such items," a senior executive from a leading consumer goods company said.

According to estimates, spending during the 2024 election season, including the general election and two assembly elections, is expected to surpass all previous records. 

According to N Bhaskara Rao, who chairs the Centre for Media Studies (CMS), a not-for-profit organisation, poll expenditure for the 2024 election season is expected to reach Rs 1.35 lakh crore.

In the home appliances market, while a harsh summer has provided the required push for purchasing items like refrigerators, air conditioners (ACs) and coolers, excess liquidity has boosted demand for products from the mass market categories. Take refrigerators, for instance. While sales of single-door entry-level refrigerators have been growing for the past year, in April their demand has soared.

Kamal Nandi, Business Head & Executive Vice President, Godrej Appliances, said demand for the mass segment is going up after a prolonged period of subdued sales. “Earlier, the mass segments were de-growing and whatever growth was recorded was in the premium segment. Last year, the market for refrigerators remained flat as the mass segment degrew by 6-7 percent by volume. In 2022, the mass segment was flat but the premium segment grew by 20-22 percent, resulting in an overall growth of 7-8 percent, which was lower than the 10 percent overall growth in 2021. Now, both are growing at an equal pace,” Nandi told BT.