Two-wheeler makers expect the revival in exports to continue during the second half of this fiscal, even as they are cautious about domestic demand during the period.

Two-wheeler exports, motorcycles in particular, have been reporting positive growth for the past two months mainly due to the strong revival of demand in Latin American and African markets, key regions for the domestic two-wheeler majors.

The cumulative two-wheeler exports during the past two months (September-October) grew by 17 per cent at about seven lakh units when compared with the year-ago period, driven by the motorcycle segment. Total bike exports grew 20 per cent in the past two months at 633,429 units (as against 529,380 units in the same period previous fiscal).

Export momentum

Bajaj Auto, the country’s top two-wheeler exporter, has seen about 23 per cent growth in its motorcycle exports at about 3.87 lakh units during September-October 2020.

“A strong revival of demand was witnessed in Latin America and Africa, while ASEAN continues to be weak and Sri Lanka has stopped all vehicle imports. The growth in Latin America is driven by the Sports segment — Pulsar and Dominar,” Rakesh Sharma, Executive Director of Bajaj Auto, was quoted as saying during an earnings’ call.

While the ASEAN market for Indian two-wheeler exports has reported about 50 per cent recovery, South Asia and the Middle East (apart from Sri Lanka) are at about 90 per cent recovery. Africa is at the 90-95 per cent level, while Latin America is at 80 per cent of previous levels, he said.

Bajaj expects the export momentum to continue, supported by a good season during the Christmas period in markets such as Philippines and Latin America.

TVS Motor, the country’s second largest two-wheeler exporter, saw a 44 per cent increase in its bike exports at about 1.41 lakh units in the past two months (as compared to about 98,000 units in the year-ago period).

The company has been gradually strengthening its export business through various measures such as distribution partnerships and retail expansion across geographies.

“TVS Motor Company is present in over 60 countries across Africa, Central and Latin America, the Indian Subcontinent and South East Asia. In the last five years, the CAGR for exports is good. Our markets such as Asia and Africa are doing well in terms of product acceptance as well as expansion of network. We are also expanding aggressively in ASEAN, CIS and LATAM regions. The growing need for safe and affordable personal mobility has fuelled the demand for two-wheelers across geographies,” said a company spokesperson.

Hero MotoCorp has also seen an increase in its two-wheeler exports, as the company has chalked out an aggressive international growth strategy.

Strong distribution

“The exports momentum of Indian two-wheelers is expected to continue in the remaining part of FY21 and FY22, primarily driven by the exporting countries’ lower penetration level, demand for usage as commercial fleet, stability in crude prices, lack of public infrastructure, and aversion to public transport in the midst of Covid-19,” said an India Ratings report.

Also, with strong market position and robust distribution network, Indian two-wheeler companies will continue to gain traction for their key offerings. But, for the full fiscal, total two-wheeler exports may report a decline due to the impact of pandemic in the first half.

“Indian companies are improving their distribution network in South Asia, Africa and LATAM regions. Strong brand recall and a well-established dealer network in these markets are likely to help OEMs such as Bajaj and TVS from a steady demand for exports,” said the report.

Related Topics
comment COMMENT NOW