October was a much-awaited month for two-wheeler companies , as demand was expected to pick up during the festive period. Especially, since there had been a slowdown in both the rural and urban markets in the first half of the year. Many companies reported retail sales of 100,000 units on the day of Dhanteras but it is best not to read much into this, as these were deliveries. Even if one discounts the festive period, one cannot rule out the volume uptick seen in October. During the month, motorcycle sales grew 5.7 per cent year-on-year (y-o-y) and 20 per cent month-on-month (m-o-m). The star of the show was the scooter segment, which grew 30 per cent y-o-y and nine per cent m-o-m.
The demand for scooters and mopeds has beaten all forecasts. This trend is expected to continue through the year, as more women are now joining the workforce and also gearless scooters have become more acceptable among men. The segment is expected to end the financial year with a y-o-y growth of 17 per cent. In the first half, scooter volumes have grown 17 per cent. Over the last few months, new launches likeHonda ’s Dio , Hero’s Maestro , TVS ’ Pep and Suzuki ’s Swish have helped push up volumes in the segment.
Interestingly, the revival in demand is not as secular for motorcycles. While demand for both premium and mass segments is down, the 110-125cc segment is growing fast. Demand in the premium segment (125-150cc) has been hit the most, declining 23 per cent between April and September. This segment accounts for 11 per cent of the total motorcycles market. The mass segment has declined three per cent in the first half and it accounts for 65 per cent of the motorcycles market. The one segment where most of the action is concentrated is the 110-125cc segment, with the launch of Suzuki’s 110cc Hayate , Honda’s 110cc Dream Yuga and Hero’s 125cc Ignitor.
Hero’s volumes have remained flat, despite launches, while Honda has seen a 70 per cent y-o-y volume growth in October. The company is planning to sell three million units of Dream Yuga in FY13. Surjit Arora of Prabhudas Lilladher says: “Honda gained market share to the tune of 440 basis points to 11.9 per cent. For year-to-date FY13, Honda’s market share improved by 450 basis points to 11.5 per cent, whereas Hero MotoCorp lost market share to the tune of 240 basis points to 52.8 per cent.” Apart from Honda, Bajaj Auto is expected to do better than Hero as exports, spares and three-wheelers are expected to account for 50 per cent of its sales by FY14.
