Two-wheeler sales rev up in India in March 2016, point to a smoother FY2016-17

In tandem with rising sales of passenger vehicles, the two-wheeler sector in India is also firing on all cylinders. Importantly, sales of motorcycles, which had seen a slowdown and caused a measure of concern to industry, are revving up once again.

A quick analysis of the sales performance as reported by the major two-wheeler OEMs for March 2016 reveals that the last month of FY2015-16 has had a positive impact on the industry sales.

All prominent manufacturers – Hero MotoCorp, Bajaj Auto, TVS Motor Company, Royal Enfield and India Yamaha Motor – barring Honda Motorcycle & Scooter India (HMSI), have reported a year-on-year growth in their respective monthly sales.

These top six players have reported double-digit growth of 13.04 percent YoY for the month. In terms of volumes, Hero MotoCorp and Bajaj Auto stand out for adding maximum volumes during March 2016.

Hero MotoCorp reported total sales of 606,542 units (including exports), a growth of 14.07 percent (March 2015:  531,750). While the company saw consistent sales of its Splendor, Passion and HF Deluxe brands, it gained remarkable traction in the 125cc category – a class dominated by HMSI with its CB Shine model – on the back of strong sales of its Super Splendor and Glamour brands.

The company has also performed well in the scooter segment by recording an increase in its market share of 14 percent to close to 21 percent. This growth is attributed to its recently launched scooter models – the Duet and the Maestro Edge.

According to the company, March 2016 was the third month when it recorded total sales of more than 600,000 unit sales in 2015-16. Prior to March 2016, Hero had recorded 600,000 unit sales in September and October 2015.

On the cumulative sales front, the company reported sales of 66,32,322 units during FY2015-16 as against FY2014-15 sales of 66,31,826 units, which marks growth albeit by a thin margin.

With FY2015-16, the company says that it has completed five years of leadership since it commenced its solo journey following its split with Honda of Japan in December 2010. According to Pawan Munjal, chairman, managing director and CEO, Hero MotoCorp, “In the past five years, we have consolidated our leadership in the face of a volatile market and intense competitive environment, even as Brand Hero has become globally known with a presence in about 30 countries across Asia, Africa and Central and South America.”

“FY 2016 has also been a landmark year for us as we achieved several firsts in our solo journey – launched our first in-house developed products, commissioned our first overseas manufacturing facility and began operations at our world-class Center of Innovation and Technology at Jaipur. In addition to our continued leadership in the 100cc motorcycle segment, we also further augmented our leading position in the 125cc segment. We backed these achievements with strong financial results as well. The industry witnessed mixed fortunes in FY16 with sales looking up in the second half of the year. Timely measures by the government and a good monsoon will be essential in sustaining this positive trend. The journey from here promises to be even more exciting as we gear up to launch our in-house-developed products,” added Munjal.

HMSI feels the heat

Number two player and an arch rival of Hero MotoCorp, Honda Motorcycle & Scooter India (HMSI) has reported a decline in its sales for March 2016. The company sold 365,384 units in the domestic market, down 4.96 percent (March 2015: 384,452).

While HMSI maintains its leadership in the scooter market, its motorcycles sales have failed to deliver in terms of large volumes for a major part of the last fiscal. However, its all-new commuter, the 110cc Livo is reported to have made its mark as one of the top 10 bestselling motorcycles in January and February 2016. According to the company, it has sold more than 150,000 units of Livo within nine months of its launch.

On the cumulative front, HMSI recorded total domestic sales of 42,83,345 units during FY2015-16. An official release quotes that “increased efficiency and flexibility in production translated to a growth of 1% even as Honda’s all three existing plants in India continued to run on peak capacity.”

Speaking on the highlights of Honda’s performance in FY15-16, Yadvinder Singh Guleria, senior vice- president – sales & marketing, HMSI, said, “From a strategic perspective, FY2015-16 was like a base camp for Honda and now we are fully armed for the steep climb in FY2016-17. As part of our future preparedness, Honda aggressively invested in innovative promotion. Digital marketing activities and created top-of-the-mind recall in customers minds. All this reinforced the differentiated the ‘Wings’ mark identity of Honda 2Wheelers in India.”

Bajaj Auto has reported total sales of 264,249 units in March 2016, thereby posting healthy growth of 25.87 percent YoY. The company had sold 209,937 units in March 2015. While the numbers include exports for the month, Autocar Professional estimates that the company may have recorded domestic sales in the region of 166,560 units. Its exports, on the other hand, are pegged to be in the range of 90,000-98,000 units in March 2016.

The company’s consolidated sales stand at 33,58,252 units during FY2015-16 as against total sales of 32,92,084 units in FY2014-15. This underlines growth of 2.01 percent YoY for Bajaj Auto, which it achieved on the back of several new product launches in the previous fiscal. Industry analysts say that several new projects in the pipeline will continue to fuel growth for Bajaj Auto in the new financial year as well.

TVS Motor Company has reported total domestic sales of 200,200 units in March 2016, which marks growth of 19.61 percent YoY (March 2015: 167,383). The company is riding on the growth of its scooter portfolio, which prominently comprises of its 110cc models such as the Jupiter, Wego and Zest.

The company has recently launched its 110cc mass commuter bike the Victor to garner volumes for itself in the coming months. Taking on the Honda’s Livo and Dream Series, the popular Victor model, which was originally launched by the company in 2002, now gets upgraded with a number of new value-for-money features in line with the growing benchmarks in the commuter bike segment. These include the company patented three-valve EcoThrust engine technology, petal disc brake and 60W high intensity headlamp, tubeless tyres, wide seat and modern styling.

Talking about the company's plans on the sidelines of the Victor launch in Pune recently, Arun Siddharth, head of marketing, TVS Motor Co, had said: “With a known name (Victor) in the family motorcycle segment, we are expecting to garner a bigger market share in the coming months. With the Victor positioned in the family segment and TVS Star and Sport positioned in the executive and budget categories respectively,  we believe that now our portfolio of commuter motorcycles is complete. We hope that the three different models will deliver expected results to us."

According to the company, the original Victor model, when it was first launched in 2002, had received a good response from the market and sold more than 40,000 units a month at its peak.

Recording a milestone in its history, Royal Enfield has reported total domestic sales of 50,059 units during March 2016 as against sales of 32,854 units in March 2015, thereby registering a year-on-year (YoY) growth of 52.37 percent in the domestic market.

It can be noted that the company had sold close to 50,000 units for the 12-month period of 2010, which underlines the surge in the demand of the Royal Enfield motorcycles over the last half a decade.

It has also recorded growth in its exports, which stood at 1,261 units last month, up by 52.85 percent. It had exported 825 units in March 2015. The company’s total sales including exports stood at a healthy 51,321 units during March 2016 – its highest-ever sales in a month.

Commenting on his company’s achievement, Rudratej Singh, president, Royal Enfield, said: “Reaching sales of over 50,000 motorcycles in a single month is a significant milestone for Royal Enfield. We approximately manufactured a similar number of motorcycles in 2010 (whole year) that goes on to show our focus and hard work that we have put in all these years. Royal Enfield also has been expanding its production commensurately to meet its customer’s expectations to own and ride our motorcycles at the soonest.”

Recording an impressive YoY growth of 44.17 percent for March 2016, India Yamaha Motor has registered sales of 60,032 units as against 41,640 units sold off in March last year. The company says that scooters (primarily the Fascino model) and the 150cc FZ series portfolio are the main contributors to its growing volumes across the domestic territories.

Commenting on the same, Roy Kurian, vice president – sales & marketing, Yamaha Motor India Sales said, “Though the Indian two-wheeler market has seen a moderate growth of around 9 percent in the first quarter of 2016 as compared to the first quarter of last year, Yamaha has continued to ride the growth curve by marking a solid 47 percent sales growth during this period.”

The company is also planning to soon roll out yet another variant in its Ray scooter line-up, the Ray ZR, which was earlier unveiled at the Auto Expo in February. The company continues to expand its India network, which remains one of its top priorities.

“We have to increase our reach and we are working towards that. It will take us some time to expand our reach to that level. We had around 400 dealerships in 2014, over 500 dealers in 2015 and we are looking to close 2016 with 650-700 dealerships. Additionally, we will set up sub-dealers to penetrate further into the territories. We will pick up pace in the 110cc commuter motorcycle segment on the back of our network penetration,” Kurian had told Autocar Professional recently.

With the Met department predicting a normal monsoon this year, expect the fortunes of rural India to improve and in turn demand for mass market commuter bikes, which will drive growth for the two-wheeler sector. This, along with the ever-growing demand for gearless scooters, should spell good news for most two-wheeler manufacturers in 2016-17.