Motorcycle sales dip for 1st time since 2007-08

Bad monsoon, shift of focus to scooters impacted motorcycle demand in 2015-16

Untimely and scanty rain hit rural incomes in 2015-16, putting pressure on two-wheeler companies, which saw a fall for the first time since 2007-08 in motorcycle sales.

Despite several launches in the ‘bread and butter’ economy segment (100cc-110cc) targeted at rural buyers, favourable fuel prices and affordable loan rates, motorcycle sales growth was muted.

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A bad monsoon apart, a shift of focus to scooters, where the gearless two-wheeler has gained preference, has also had its impact on motorcycle demand.   

Two-wheeler market leader Hero MotoCorp failed to exceed its 2014-15 sales as rural demand, 40 per cent of volumes, remained disappointing. The company’s Splendor motorcycle brand was pulled down to second spot, replaced by Honda’s Activa, the country’s biggest two-wheeler brand and the largest selling scooter. Hero had added three upgrades – Splendor Pro, Passion Pro and Extreme Sports —  last year.

Penetration of scooters in the rural markets is still low, though, under 10 per cent of overall scooter sales.

One of the biggest gainers last year was Pune-based Bajaj Auto, the country’s third largest two-wheeler maker. The company was among a handful of two-wheeler makers to post a rise in market share. This was achieved through the success of newly launched models under the Avenger, CT100 and Pulsar brands. The Pune-based company is doubling capacity to meet demand, especially for models such as the new V15 and Avenger. The former, a 150cc motorcycle and priced close to a 125cc one, presently has a waiting of 15-30 days.

Eric Vas, president (motorcycle business), Bajaj Auto, said: “We are confident of achieving market share of 22 per cent by the end of this year. The V15 has been very well received and we are ramping up capacity of the bike to 20,000 units, from 17,000 units. The Avenger is doing about 25,000 units a month.”

Hero’s arch-rival, Honda, was the biggest loser of market share last year in the motorcycle segment. The company has been expanding its reach into the rural markets but supplies haven’t kept pace. Honda Motorcycle and Scooter India, the second largest two-wheeler maker, has been running its plant to full capacity primarily to meet demand for the Activa.

Honda’s Dream series motorcyles and the CB Twister, which are in the up to 110cc category, could not create the expected impact. However, the new Livo brand has generated some excitement, say industry sources.

Driven by the Classic range, Chennai-based Royal Enfeld reported the biggest jump in market share, to 4.66 per cent. The company recently launched a Himalayan off-road motorcycle and is gradually ramping up output for it.  

After two years of drought-like conditions, companies are hoping for a good monsoon to lift spirits this year. “Timely measures by the government and a good monsoon will be essential in sustaining the positive trend from the second half of FY16. The journey from here promises to be even more exciting as we gear-up to launch our in-house developed products,” recently said Pawan Munjal, chairman, Hero MotoCorp.