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Neha Kaushik

According to the study, while the average realisation was at Rs 24,698 per bike in FY1998, it increased to Rs 28,555 in FY2001.

New Delhi , Oct. 20

THE entry of newer models into the motorcycles segment has slowed down the growth in average realisations on motorcycles in the past few years. According to an ICRA study on the Indian automotive industry, "In FY2002, the increase in realisations was only marginal, as new players made an entry and introduced new models in quick succession, thus limiting the ability of the established players to raise prices."

In sharp contrast, the average realisation per bike grew rapidly during the period FY1997 and FY2001, following a rise in demand for motorcycles and the ability of players to command a premium on their products.

According to the study, while the average realisation was at Rs 24,698 per bike in FY1998, it increased to Rs 28,555 in FY2001. However, the increase was only marginal in FY2002 to Rs 28,765.

On the other hand, though scooters are steadily losing market share, the trend in average realisation per scooter has been fluctuating with a sharp decline in the past year.

However, the average realisation improved in FY1997-2000, followed by a sharp increase in FY2001. The study points out that the increase during 1997-2000 was on account of growing penetration of the higher priced LML scooters and the rise in demand for gearless scooters. In FY2001, the average realisation for LML was around Rs 27,800 while for Bajaj Auto, it was around Rs 19,900.

The sharp increase in the average realisations of scooter manufacturers in FY2001 resulted from the price increases made by the players who added catalytic converters to their scooters to meet the stringent emission norms that came into effect in April 2000. According to the ICRA study, in FY2002, there was a decline in average realisations of scooter manufacturers because of the abolition of the special excise duty on two-wheelers with engine capacity higher than 75cc. Following this duty rationalisation, the players concerned were able to pass on the benefits of excise duty rationalisation to customers through price cuts. As a result, the average realisation fell from Rs 22,907 in FY2001 to Rs 21,896 in FY2002.

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