Honda Motorcycle & Scooter India has emerged as Number 2 player in the motorcycle segment by displacing Bajaj Auto.  

Continuing sluggishness in the commuter bike segment pulled down Bajaj’s overall bike volumes. 

During the first quarter of the current fiscal, Honda’s total bike sales stood at 433,026 units, up from 223,860 units in the year-ago quarter. Bajaj’s total motorcycle sales dropped to 308,159 units in Q1 of this fiscal compared to 341,559 units in the year-ago quarter. Hero remained the top player with total bike volumes at 12,46,827 units during the period. 

In the post-Covid era, the two-wheeler market has not exhibited sustained recovery despite a favourable rural economy, which drives the bulk of the volumes in commuter bike segment. A significant increase (25 per cent plus) in price of new two-wheelers and very high prices of petrol led to sluggish demand. 

As a result, Bajaj Auto, a major player in the commuter bike segment, saw a steep decline in its 110cc-and-below segment bikes at 93,552 units during the first quarter compared to 139,849 units in the second-wave hit Q1 of last fiscal. This segment accounted for 53 per cent of overall bike volumes. 

As demand remains fragile, exclusion of the entry-level bike segment in the recent third-party insurance premium hike will be a relief for the industry as a further increase in the cost of acquisition could have constrained demand recovery . But, OEMs have announced further price hikes this month, which is likely to impact demand. 

While there is hope for positive growth this fiscal, the motorcycle market has seen a premiumisation trend gathering pace as an increasing number of buyers prefer higher-powered bikes.  

The two-wheeler makers have also been introducing newer models in higher CC bike segments to take advantage of the change in demand pattern. 

Higher cc segments

Bajaj has also chosen to strengthen its focus on higher cc bike segments and has already vacated the kick start category in the entry bike segment. As part of its premiumisation strategy, it recently launched its all-new Pulsar N160, a 160cc bike with dual channel ABS. This new bike has been launched in a fast-growing category, which sells about 1.8 lakh units a quarter. 

Rating Agency ICRA is cautiously optimistic about two-wheeler demand recovery in FY23, amid multiple headwinds. Given the elevated ownership cost, the expectation of high general inflation and an increase in financing rates may dampen demand for discretionary goods.  

While monsoon arrived in a timely manner, its progress and even distribution will be crucial for rural cash flows and demand sentiments. Nevertheless, easing chip shortage issues and softening commodity pressures, all coupled with a low base, may result in decent growth for the two-wheeler market in FY2023, it pointed out. 

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