Two-wheeler sales hit speed bump in Jan

The note ban impact was seen more on companies that have major exposure to motorcycle sales

While sales of commercial and passenger vehicles seem to have recovered from the impact of demonetisation, the two-wheeler industry continues to be under pressure.
 
This is due to a drop in motorcycle sales, driven by the rural economy. According to industry sources, sales of heavy and medium commercial vehicles (CVs) grew around one per cent in January, while passenger car sales grew in double-digits. However, domestic two-wheeler sales dropped by around seven per cent to 1.26 mn units. This was despite two-wheeler makers having reduced the down-payment. Some dealers also waived it.
 
Bajaj Auto’s domestic motorcycle sales were down by 15 per cent to 119,803 units in January from a year before. Hero MotoCorp's dropped by 13 per cent to 487,088 units. TVS Motor's dropped to 207,059 units, from 208,485 units in the same month a year before mainly due to a drop in motorcycle sales; scooter sales grew by 12 per cent.
 
Among the top players, only Honda saw growth, by around two per cent to 368,145 units in January. Yadvinder Singh Guleria, senior vice-president for sales at Honda Motorcycle & Scooter India, says there has been a post-demonetisation recovery in urban areas, while rural economies continue to be under pressure. Around 80 per cent of the sales in rural areas are  of motorcycles, he explains. Their scooter performance, he added, was due to product launches, additional capacity, increase in network and marketing.
 

Also, they’d worked with financiers to ease the burden on retailers and customers (such as reducing the down-payment). He expects the rural market to come back by end-April.
 
Passenger vehicle volumes, as mentioned earlier, recovered sharply in January. Most of the large original equipment makers have reported strong year-on-year growth in wholesale volumes. Maruti's domestic volume grew by 25.9 per cent to 133,934 units in January; Hyundai's grew by 10.5 per cent to 42,017 units.  Toyota Kirloskar reported a 21 per cent increase in domestic sales at 10,336 units.     
 
Nissan saw a 62.9 per cent rise to 4,346 units and Tata's grew 21 per cent to 12,907 units.
 
Though the CV market reported only one per cent growth, experts note this is on a high base. January sales were driven mainly by demand ahead of the change to stiffer emission norms in April.
 
CV sales could see single-digit growth over the next two months and it is expected that the industry volumes would come under pressure after April.