Two-wheeler sales may vroom on good monsoon, new launches

G Balachandar Chennai | Updated on January 16, 2018 Published on October 13, 2016

two-wheelers   -  REUTERS

Likely to see double-digit growth this fiscal

The two-wheeler industry is likely to record double-digit growth this fiscal thanks to a good monsoon, benefits of the Seventh Pay Commission and new launches.

The first two quarters have proved to be good for the industry with a 14 per cent increase in sales in the first quarter and 21 per cent growth in the second. The industry expects a good third quarter with the festival season contributing to robust sales.

Record monthly sales

In September, companies reported robust sales with both Hero and Honda netting their highest-ever monthly sales of 6.75 lakh units and 5.69 lakh units respectively. The industry hopes the festival season will bring in good numbers in October too, while the revival of the rural market, a major contributor to motorcycle sales, and new product launches are aiding in strong growth.

Rabi prospects

“Good rabi crop continues to benefit motorcycles which can be seen in the good performance so far. Rural driven motorcycle segment (about 50 per cent rural contribution) is expected to grow after stagnating for the past couple of years, due to positive monsoon and good expectation of kharif production in FY17,” says a SIAM document to analysts.

YS Guleria, Senior Vice-President – Sales and Marketing, Honda Motorcycle & Scooters India (HMSI), pointed out that the Seventh Pay Commission, One Rank, One Pension (OROP) disbursements and favourable monsoon had led a robust return of demand in the two-wheeler sector.

“Overall, led by festival buying, Honda is confident of a bumper October sales,” he added.

To take advantage of the revival of momentum, half a dozen motorcycle launches have been planned during September-December, in addition to introduction of various colour and special edition variants of the existing models.

Motor cycles

“For motorcycles, there are two key periods when purchases from companies typically spike – September and October corresponding to the pre-festival period, and January purchases with the new model year,” says Subrata Ray, Group Vice-President-Corporate Ratings, Icra.

Scooter segment

The scooter segment too is expected to maintain robust growth due to new model launches, increasing shift from motorcycles in semi-urban and rural areas, and expansion of dealership network and touch points in these markets.

“The two-wheeler segment is expected to close FY17 with a 10-12 per cent growth, driven by strong festival season with a revival in the rural economy and improved penetration of organised financing in tier 2 and tier 3 cities,” stated Rakesh Batra, Partner and sector leader, Automotive, EY India.

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Published on October 13, 2016
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