Hero MotoCorp, Honda claim record two-wheeler sales
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Mumbai: The fight for volumes in India’s hyper-competitive two-wheeler market reached a peak in September with the top two makers laying claim to market share and volume gains.
Other manufacturers, too, saw sales advance in the high double digits as a good monsoon and a revival in rural sales combined to raise hopes of robust sales growth at dealerships.
Hero MotoCorp Ltd, the market leader, on Monday said it dispatched 674,961 units in September, up 11% over a year ago. This was the highest monthly sales reported since October 2015 when it sold 639,802 units, the Pawan Munjal-led firm said. The maker of Splendor and Achiever brands attributed the sales to the successful launch of the Glamour 125cc and Splendor i-Smart, an indigenously developed motorcycle, and a positive trend maintained by the new scooter line-up.
Hero said this is the second consecutive month that it has sold 600,000-plus units after clocking 616,424 unit sales in August, and the fourth this calendar year.
Two-wheeler makers are optimistic about a bumper festive season, expecting a swing in demand following hikes in the salaries of government employees after the seventh pay commission recommendations. But analysts said the impact will only be marginal and that retail sales will be a true reflection of the demand on the ground. “Will get to know of actual sales only at the end of the tenth day period,” said an analyst at a domestic brokerage asking not to be identified. He expected sales to cool off from November, after the end of the festival season.
Manufacturers report despatches to dealers. The most important days for two-wheeler firms are Dussehra —the tenth day of the Durga Puja—and Dhanteras, the day before Diwali, which is considered auspicious for big-ticket purchases.
Hero, which sells four out of 10 models in rural markets, is the biggest beneficiary of an upturn in rural demand. The Rural Demand Index of Citi India’s Economic Research for 2016 (average January-June) is up ~13% over the average for 2014 and 2015, the two drought years, wrote Samiran Chakraborty and Anurag Jha, economists at Citi India, in a 3 October report. However, it is still down ~20% from the average of 2010-12 when rural demand was at its strongest. The macro factors in the rural index are pointing towards an even sharper recovery in July-August which could be an early indication of the impact of a good monsoon, they wrote.
Meanwhile, Honda Motorcycle and Scooter India Pvt. Ltd, the second largest in the pecking order, also notched up a record month, with monthly sales crossing the 500,000-mark for the first time. Honda’s sales zoomed 31% to 539,662 units over a year ago.
Honda claimed it is the high volume gainer in the two-wheeler market. It’s also the only firm to have gained a 3% market share in the industry. Yadvinder Singh Guleria, senior vice-president, sales and marketing credited it to “positivity in the economy led by 7th central pay commission, one rank one pension disbursements and a favourable monsoon.”
Among other makers, TVS Motor Co.’s domestic sales during the month jumped 30%, Pune-based Bajaj Auto Ltd saw its sales advance 23%, and sales at India Yamaha Motor Pvt. Ltd and Eicher Motor Ltd’s Royal Enfield also surged 33% and 30%, respectively.