Demand for two-wheelers soars2 min read . Updated: 05 Oct 2020, 06:25 AM IST
- Sales of bikes picked up after the lockdown was eased in the first week of May
People are rushing to buy or renew their two-wheeler insurance policies as they prefer to commute using their own vehicles to avoid the risk of contagion in crowded public transport during the coronavirus pandemic.
While insurance data for two-wheelers is not publicly available, insurance and two-wheeler industry executives said there was a surge in sales of two-wheelers and insurance during August and September, contrary to their expectations.
“The market started picking up from July, which was perhaps indicative of pent-up demand. However, looking at the sale volume in August and September, the market seems to be surging beyond the pent-up demand and is actually seeing renewed demand," said Sanjay Datta, chief of underwriting and claims, ICICI Lombard General Insurance Co. Ltd, India’s largest general insurer outside government control.
Sajja Praveen Chowdary, business unit head of motor and travel insurance at PolicyBazaar.com, said sales of policies rose sharply after India eased curbs. “In August and September, the industry has seen a 50% jump (as compared to expected premium) in overall two-wheeler insurance premium collections."
Sales of entry-level motorcycles and scooters picked up in rural and semi-urban towns after the lockdown was eased in the first week of May. The trend may continue as people will continue to prefer personal mobility to public transport and with truncated income levels, two-wheelers are cost-effective, said auto industry experts.
According to data issued by the Federation of Automobile Dealers Associations, sales of two-wheelers jumped nearly sixfold to 898,775 units in August from 159,039 in May.
The faster recovery of two-wheeler demand in rural markets has been helped by a good summer crop, above-normal monsoon, government sops and fewer covid-19 infections. There were about 150 million two-wheelers in the country of which around 35-40% were insured. A major part of the spike in insurance sales came from cities and towns as law enforcement is not as strict in rural areas, said Chowdary of PolicyBazaar.
People have started coming out in main cities, and they are buying insurance, he said.
“New policy sales are directly proportional to bike sales. The month-on-month growth is back, but it will take a while to go back to pre-covid levels. Online platform sales have shown a definitive growth as people are avoiding going out," said Chowdary.
Hero MotoCorp Ltd, India’s largest two-wheeler maker, sold 355,595 two-wheelers in July and 328,068 units in August. Second-ranked Honda Motorcycle and Scooter India (HMSI) reported retail sales of 201,432 units in July and 223,496 in August.
“Almost 95% of dealer network is functioning, and increased economic activity in urban areas will increase the need for personal mobility," said Y.S. Guleria, director, sales and marketing, HMSI. “In the last two months, southern and eastern states have responded the most in terms of sales. Recovery in southern India is acting as a tailwind."
TVS Motor Co.’s showroom sales picked up from 124,144 units in July to 139,963 in August. Bajaj sales improved from 93,371 units in July to 100,000 units in August.