MUMBAI: Sales of two-wheelers will likely see a marked improvement during the festival season, with dealers expecting double-digit growth in urban areas, supported by a pick-up in business activities and re-opening of educational institutions, according to Emkay Research.
In comparison, demand is expected to be subdued in rural areas as consumer sentiments is yet to normalise after the devastating second wave of the coronavirus pandemic. Dealers have built inventories of up to two months in anticipation of healthy festival season sales.
Among original equipment manufacturers (OEMs), Honda, Suzuki, Bajaj Auto and TVS Motors are expected to do better than Hero MotoCorp during the festival period due to higher exposure to urban markets. Royal Enfield is expected to be severely hit due to semiconductor shortage.
"Enquiries and bookings are increasing for electric 2-wheelers, considering central/state government incentives and increasing petrol prices. In addition, driving range anxiety is limited as general usage of 2-wheelers is below 50 kms per day, which is much below the range being offered in most E-2Wheelers. Few Ampere models have portable batteries, which makes it easier to charge the batteries," Emkay Research said.
Chip shortages, however, will impact festive retail sales for passenger vehicles (PVs). “Order bookings are extremely strong, with a waiting period of up to six months for top selling models. CNG vehicle demand is robust due to the lower cost of running in comparison to petrol/diesel vehicles."
"Dealers expect a subdued festive season, owing to supply constraints. Dealer inventory levels are low at 1-2 weeks. Assuming supply issues persist, dealers may run out of stock by Oct’21-end. Among OEMs, Tata Motors is doing well, while Maruti Suzuki’s market share is under pressure owing to severe production constraints and absence of new products," Emkay Research added.
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