New Delhi, Nov 30 (TIWN) Demand for two-wheelers, tractors and passenger vehicles has led to an accelerated recovery in the vehicle finance (VF) sector over the past six months, equity research firm Motilal Oswal Financial Services said in a report.

Accordingly, the report predicted that credit costs across vehicle finance (VF) players is expected to be 1.7-4.4 per cent in FY21 and gradually revert to run-rate levels over FY22-23.  "By August-September 2020, sales in most product categories picked up to prior year levels. PV sales for the industry improved significantly to nearly 100 per cent of prior year levels in 2Q from sub-30 per cent levels in 1QFY21," the firm said in the report.  Similarly, 2W and Tractor sales surpassed prior year levels in August and September.  "2W and PV segments have benefitted from the preference towards personal mobility solutions. Tractors have benefited from a healthy monsoon in 2019, coupled with a strong Rabi crop," the report said.  However, the M&HCV segment continued to be a laggard.