Two-wheeler, PV sales roar on rural demand

Original equipment manufacturers like Bajaj Auto, TVS Motor Co. and Hero MotoCorp witnessed domestic two-wheeler volumes grow by 102%, 32%, and 9%, respectively. Electric two-wheelers volumes grew faster than internal combustion-engine (ICE) vehicles. For Eicher Motors, sale of its premium motorcycle brand Royal Enfield rose nearly 33% on the back of improving supply of semi-conductor chips, which led to muted sales in the first quarter of last year.

“May is a crucial month in terms of sales for two-wheelers, given the all-important wedding season which propels sales of two-wheelers, especially in rural areas", equity research firm Elara Capital said.

May witnessed a rebound in passenger vehicle volumes with leading Indian car manufacturers, such as Maruti Suzuki, introducing new models to the market.

Wholesale dispatches across the passenger vehicle industry surged ahead of retail sales as manufacturers fulfilled existing orderbooks and stocked more vehicles in the showrooms. While wholesale and retail sales reached historical highs in May, with 334,800 units and 325,258 units, respectively, month-on-month improvement in PV sales was comparatively limited.

Retail sales also continued to lag wholesales for the second consecutive month of this financial year.

Maruti Suzuki said demand was primarily driven by the rural markets in May. India’s leading carmaker also improved its market share by 1% during the month to 43% of the total PV sales, and is commanding more than 20% share of the sport utility vehicle (SUV) market steered by new launches. However, Maruti saw a sharp dip in sales of its micro-car segment, primarily due to a decline in sales of the Alto.

Maruti Suzuki, Hyundai Motor India, Mahindra & Mahindra, Tata Motors, and MG Motor India, saw their wholesales grow by 16%, 15%, 37%, 6% and 25%, respectively.

“The continued expenditure in infrastructure build up in rural areas has really helped rural sales. Spending on infrastructure built into the Budget is now reflecting on the ground, and rural income levels have been rising. Harvesting, which was expected to be poorer because of the rains hasn’t really been affected as much. We have seen minimum support prices (MSP) improve for crops and, therefore, there is an improvement in the sentiment, except that people are just worried about the El Nino effect, going forward. So far, however, it hasn’t really panned out in an adverse way. Rainfall is still higher than the average across the country, which makes our outlook more positive," said Shashank Srivastava, senior executive director, Maruti Suzuki.

“And, finally, May is also the month of marriages in India, especially in the western, central and northern parts. We do see an uptick in rural demand this time. These are some of the factors which have helped our sales last month," he added.