Two-wheeler growth dips with sales in FY16

Overall two-wheeler sales dropped to a modest 3.01% for full year from 8.09% in previous year

Motorcycle and moped sales were down 0.24 per cent and 3.32 per cent in FY16, thanks to dampened rural demand. This, in turn, dragged the overall two-wheeler sales growth rate down to a modest 3.01 per cent for the full year from an 8.09 per cent overall growth rate in the previous year.

According to data from the Society of Indian Automobile Manufacturers (SIAM), motorcycle and step through sales dipped by 0.24 per cent to 10.7 million units in FY16 compared to 10.72 million units in FY15. In the previous year (FY15), motorcycle sales had actually grown by 2.5 per cent over FY14.

The slowdown in motorcycle sales brought down the overall two-wheeler sales, even as the scooters segment grew by 11.79 per cent in 2015-16 to 5.03 million units. Moped sales, too, were down by 3.32 per cent to 723,767 units last fiscal.

Growth rates of scooters, too, have fallen compared to 2014-15 fiscal, when it had grown by 25.06 per cent. Mopeds, too, had clocked a 4.51 per cent growth rate in 2014-15.

Credit rating agency ICRA feels that it is primarily on account of subdued rural demand that motorcycle and moped sales have fallen. According to a latest analysis by ICRA, the income growth in the rural sector has been weak over the last two fiscals with two consecutive drought years impacting kharif production while the rabi crop was affected by unseasonal rains.

“Last year has been a year of mixed fortunes for the two-wheeler industry. Erratic and deficient rains, coupled with the El-Nino effect have caused a muted response, particularly in the rural areas. We believe it is a short-term impact and with predictions of a better than expected monsoons, the industry is poised to grow this year,” said Arun Siddharth, head of marketing-motorcycles, TVS Motor Company Ltd.

Aniruddha Haldar, Head of Marketing - Scooters, TVS Motor Company claimed that scooters have done well in the rural as well as the urban markets.

"We believe with the overall Industry poised to expand, the differentiated TVS portfolio would ensure that we are able to cater to a wide range of consumers with products that would feel to them as having been custom designed for their needs.