Hero Honda leads rise in two-wheeler sales

Continuing the positive sales performance seen in February, Hero Honda, the country’s largest manufacturer of motorcycles, posted 10.3 per cent growth in sales for March this year, selling 353,342 units against the 320,574 units sold in the same month last year.

While the entire two-wheeler industry grew by 1.7 per cent for the 11-month period beginning April 2008, Hero Honda grew an impressive 11 per cent.

Analysts say the company, celebrating its 25th anniversary this year, has managed the downturn in the industry in three ways. “One is its unparalled rural network, which roughly translates into a rural-urban sales mix of 50:50. Most rural customers make cash-down payments. The second is its bestselling 100cc motorcycle brands like Splendor and Passion, the largest selling models in the category. This segment contributes over 60 per cent to the company’s sales. The third is the brand equity of Hero Honda,” said Vaishali Jajoo, analyst, Angel Broking.

Chennai-based TVS Motors posted 2 per cent growth in March this year, selling 105,648 units as against the 103,975 units it sold in March last year. Honda Motorcycle and Scooter (HMSIL), which makes popular scooter brands like Activa and Dio, recorded 2.4 per cent growth in March, selling 81,865 units of motorcycles, scooters and CKDs. The figure includes domestic sales and exports.

“Once the RBI’s repossession norms are finalised, repossession of vehicles in case of loan defaults will become easier. Then, financiers, especially those from non-banking finance companies and private banks, will come back to the market to lend,” said Venu Srinivasan, CMD, TVS Motors. Srinivasan had earlier said that sales of two-wheelers depended on the cost and availability of funds.

Recovery could also come from the slew of new models that are in the pipeline. In addition to launching its bestselling XCD 135 this year, Pune-based Bajaj Auto plans to launch four brand refreshes and two new models in the high-power category. Others like Honda, TVS Motor and Hero Honda also plan to launch either newer versions of existing models or new models in 2009.