Hero, Honda and Bajaj record new highs in FY2016-17  

Most of the prominent two-wheeler manufacturers have posted record sales as the last month of FY2016-17 came to end in the midst of rampant sales of BS III-compliant stock. Although the impact of the last minute clearance sale (of BSIII 2Ws on March 30-31) on the OEMs’ monthly records remains unclear, the industry has indicated that it has managed to sell off the majority of its BS III inventory by offering heavy discounts.

FY2016-17 brought many accolades for the two-wheeler industry including the individual achievements by major players. For example, Hero MotoCorp, India’s largest two-wheeler manufacturer, has registered its highest ever sales for any fiscal in FY2016-17. Similarly, in a first, Honda Motorcycle & Scooter India (HMSI) has crossed the milestone of achieving five million unit sales during FY2017, thus also becoming the largest 100 percent subsidiary for Honda Motor Company, Japan to do so.

On the other hand, Bajaj Auto has restored its annual domestic sales mass of over two million units after a gap of three years. Premium bike maker, Royal Enfield continued with its juggernaut as it posted its best ever monthly performance in March 2017.

The total monthly numbers, reported until now, indicate that the two-wheeler industry (including Hero MotoCorp, Bajaj Auto, TVS Motor, Yamaha, Royal Enfield, and Suzuki) has posted a mild growth of 3.13 percent YoY over its March 2016 performance.

Hero MotoCorp has reported sales of 609,951 units in March, up by a flat 0.56 percent YoY. The company had sold 606,542 units in March last year.

FY2016-17 stood out as a good year for the company as according to the official communication it has surpassed the monthly sales milestone of 600,000h units five times during FY2016-17. The company had achieved sales of more than 600,000 units in March 2017 (609,951), October 2016 (663,153), September 2016 (674,961), August 2016 (616,424) and April 2016 (612,739).

During the last fiscal, the Pawan Munjal-led company forayed into its 35^th international market – Argentina – where it unveiled its all-new 125cc Glamour model. The event marked first-ever global launch of a new product by Hero MotoCorp outside of India. The company had also rolled out its all-new Splendor iSmart 110 and Achiever 150 with iSmart feature during the last fiscal.

On the cumulative front, the company has clocked its highest ever sales in a fiscal at 66,63,903 units as against the retail of 66,32,322 units in FY2015-16.

Although Honda, the number two player in the domestic two-wheeler industry, has not disclosed its March-specific sales, it has reported crossing yearly sales milestone of five million units during FY2016-17. HMSI has clocked total sales of 5,008,103 units during the period, which includes sales of 3,351,604 units of the automatic scooters. This also underlines that Honda’s scooter sales crossed the three million mark for the first time. Last fiscal (FY2015-16), HMSI had reportedly sold 2,892,480 scooters.

HMSI’s annual sales have grown by 12 percent YoY in FY2016-17. The company had clocked cumulative sales of 4,483,462 units in FY2015-16.

Sharing highlights of the company’s FY2017 performance, Yadvinder Singh Guleria, senior vice-president - sales and marketing, HMSI said; “In the beginning of FY2016-17 especially after the monsoon and 7th CPC, the industry was hopeful of double-digit growth. The second half was, however, a challenging time and two-wheeler industry closed the fiscal with only 5 percent growth. We thank customers for making Honda 2Wheelers India the first 100 percent subsidiary of Honda Motor Company, Japan globally to ever achieve the five million sales landmark in a single financial year. We are confident that 2017-18 will be a landmark year.”

The third largest two-wheeler player, TVS Motor Company has recorded total two-wheeler sales of 216,995 units in March 2017, up by 8.39 percent YoY. It had sold 200,190 units in the domestic market in March last year. According to the company, its scooter sales grew by 23.5 percent at 84,173 units in March 2017. TVS Motor’s total scooter sales stood at 68,161 units in March 2016.

The motorcycle sales, on the other hand, grew by 10.3 percent increasing from 86,776 units sold in March 2016 to 95,671 units retailed in March 2017.

The company has also conveyed that it has sold majority of its BS III-compliant stock during March 30 and 31. It is assessing the one-time impact of the transition from BS III norms to BS IV emission standards on the financials of the company.

India’s fourth largest two-wheeler manufacturer by domestic sales, Bajaj Auto has reported a decline of 14.33 percent YoY during March 2017. The Pune-based company sold 151,449 motorcycles last month as against 176,788 motorcycles that were retailed in March last year.

The decline in Bajaj Auto’s March sales can be attributed to its early upgrade to the BSIV emission standards, which in-turn had resulted into a hike across its product portfolio. The company, therefore, had lost some sales to the cheaper pricing (of BSIII compliant motorcycles) by its rivals.

Eric Vas, president, motorcycle business, Bajaj Auto, who has recently spoken to Autocar Professional, has raised his concerns over the same. “We began producing BS IV bikes from September 2016 and shipping them to dealers from October. Progressively, we rolled out our entire range until January 2017, which is when we stopped making BS III-compliant vehicles altogether. Most of our dealerships have BS IV-compliant bikes. There will, of course, be some BS III inventory, which will finish off by end-March. From a market perspective, we will have a price disadvantage because a BS IV vehicle is more expensive (than BS III). There is additional equipment that you put on the vehicle to comply with the evaporative norms, exhaust emissions and other technical aspects that involve extra costs. So, obviously, we are concerned about the price advantage others might have if they put out a lot of BS III-compliant bikes in the market. However, how long that advantage will last?” he had questioned.

Notwithstanding its performance during March 2017, the company has recorded a decent growth in its domestic motorcycle sales. It has reported sales of 2,001,391 motorcycles during FY2016-17 thereby achieving the two-million unit milestone after a gap of three years. During FY2015-16, the company had recorded total domestic motorcycle sales of 1,898,957 units. This accounts for an annual growth of 5.39 percent YoY.

India Yamaha Motor, which is also the fifth largest two-wheeler manufacturer in India, has registered total domestic sales of 76,144 units (including shipments to Nepal) during March 2017. The company, which had sold 60,032 units in March last year, has grown by 26.84 percent YoY. The company has recently rolled out its BSIV compliant models as per the mandate to sell only such vehicles from April 1, 2017.

The company is estimated to have sold off its entire BS III-compliant inventory over March 30 and 31, thanks to the hefty discounts offered on different models. In Pune, one of the prominent urban two-wheeler markets for OEMs, the Yamaha dealerships offered discounts on its scooters and motorcycles ranging between Rs 6,000 to Rs 10,000 on the ex-showroom prices.

Commenting on the company’s sustained growth, Roy Kurian, vice president, sales and marketing, Yamaha Motor India Sales said; “March 2017 was challenging as the automobile sector in India had to offload BS III inventory which was re-affirmed by Supreme Court’s decision towards the closing. Yamaha, however, has managed it well and logged in a decent growth for this month. The company is en route to achieving its yearly sales target of one million units in 2017. Yamaha has already introduced its new line of BS IV variants which will gain traction amongst its customers.”

Continuing its YoY growth, Royal Enfield has posted its best-ever month in March 2017, when it has reported sales of 58,549 units, up by a handsome 16.96 percent YoY. It had sold 50,059 units in March last year.

On a year-to-date (YTD) basis, the company has sold a total of 651,107 motorcycles as against 498,791 units sold during the same period for the previous year. According to the company, Royal Enfield currently has a dealer footprint of 675 dealer touchpoints across the country.

Driven by buoyant demand for its products, Suzuki Motorcycle India has also reported a substantial upward jump of 74.28 percent YoY. It sold 36,029 units in March 2017 as against its retail of 20,673 units in March last year.

According to an official release from the company, it has crossed the milestone of cumulatively selling 350,000 units during FY2016-17, which underlines an annual growth of close to 12 percent. The company management has now set itself a target of achieving annual sales of half a million units in FY2017-18.

“For FY 2017-18, Suzuki will be targeting sale of 500,000 units for which it is gearing up its product line-up, expanding dealership networks and also becoming aggressive on exports. Suzuki has a stronger positive outlook for the future and expects to maintain its growth momentum in the fiscal 2017-2018,” quotes the company note.

The industry is now hopeful to continued growth in the first quarter of FY2017-18.