Two-wheelers may see sluggish sales this festival season2 min read . Updated: 08 Sep 2018, 10:44 AM IST
Sales at a standstill in flood-hit Kerala, down over 50% in Bengal after policy changes
New Delhi: Two-wheeler manufacturers may have to face a subdued festive season this year as sales of motorcycles and scooters in important markets such as Kerala and West Bengal are down by 60% or more—because of floods in the former case and adverse policy announcements in the latter.
Usually the festive season generates a third of the sales recorded in a year.
Vehicles sales in Kerala have come to a standstill after the state was hit by floods, with a tepid Onam that kicks off the festive season.
Meanwhile, sales in West Bengal—one of the populated states—are down almost 60% after the Mamata Banerjee-led government said that only people with a driving licence will be allowed to buy vehicles. The new rule is aimed at curbing road accidents.
The two states, Kerala and West Bengal put together contribute more 10% of the total sales of the industry, roughly translating to 60,000 units per month, according to a senior executive at one of the largest two wheeler manufacturing companies.
“We will have to compensate the loss from these two states by pushing more in other states. Both the states are very important markets for us. This decision by the state government of West Bengal has hurt sales of both motorcycles and scooters and sales have fallen by more than 50% in the last few months," said the executive on condition on anonymity.
Mino Kato, the president and chief executive of Honda Motorcycles and Scooters India, agreed that two-wheeler sales in both the states have been hit and said that the manufacturer will try to compensate for this reduction by pushing more inventories in the other states.
“This fiscal year we were looking at a double-digit volume growth but even after the difficult situation in Kerala and West Bengal we are planning to recover from the other states," added Kato on the sideline of the annual convention of the Society of Indian Automobile Manufacturers (SIAM).
The industry body has already moved the Calcutta high court against the state’s new policy.
“The festive period in West Bengal is a little longer than other states. It starts with Durga Puja and stays till Diwali. Hence the impact is pretty severe, while sales in Kerala are negligible right now. So for two-wheeler manufacturers it will be difficult festive season this time," said a senior industry executive on condition of anonymity.
“In India, one licence holder can buy two or more two-wheelers and there is no cap on that. As such, people will find a way to buy their vehicles," according to Anil Sharma, associated director, MarketsandMarkets.