Two-wheeler sales see uptick in June as monsoon arrival boosts sentiment

India’s two-wheeler industry saw growing sales in June as the onset of monsoon in various parts of the country improved buyer sentiment, especially in rural and semi-urban areas, which contribute to a major chunk of two-wheeler demand. 

The big four – Hero MotoCorp, Honda Motorcycle & Scooter India (HMSI), TVS Motor Company and Bajaj Auto – who define the direction of the industry registered growth in their June 2016 sales.

The largest two-wheeler manufacturer, Hero MotoCorp registered total sales of 549,533 units last month, crawling up by 1.32 percent YoY (June 2015: 542,362 units). The company, which continues to sell the Splendor as its leading brand of commuter motorcycles, has beaten HMSI in the 125cc executive commuter motorcycle segment, thanks to the soaring sales of its Glamour model variants.

Incoming Splendor iSmart 110 to boost sales

Hero MotoCorp’s bestselling two-wheeler brand (Splendor) is soon expected to add an all-new model to its line-up – Splendor iSmart 110. This is the first motorcycle to have been fully developed by the engineers at the company. The model was first unveiled at the 2016 Auto Expo by Dr Markus Braunsperger, an ex-BMW Group veteran now working with Hero MotoCorp as the chief technology officer.

According to SIAM data, the Splendor brand alone contributes close to 40 percent of more to Hero MotoCorp’s overall two-wheeler sales. The existing Splendor iSmart, which uses company’s conventional 97.2cc, single-cylinder engine, fetches monthly sales of more than 25,000 units on an average.

The incoming iSmart model will also bring two-wheeler start-stop technology in the 110cc motorcycle segment, which is estimated to give a good boost to sales under the Splendor brand.

In the scooter segment as well, Hero’s latest models – the Duet and Maestro Edge – have received a good response from the domestic market. The Duet has been faring well, particularly in the family scooter space and has been garnering an average monthly sale in the range of 30,000-35,000 units – a healthy number given Honda’s dominance in this space.

Honda biggest gainer in growing market

Honda Motorcycle & Scooter India (HMSI), the second largest-selling two-wheeler manufacturing company in the domestic market, recorded sales of 408,141 units in June 2016. It grew 23 percent YoY for the month (June 2015: 331,797). According to the company, its automatic scooter sales, led by the Activa brand, grew by 21 percent YoY and stood at 265,439 units for June 2016. Its motorcycle sales, led by CB Shine SP, CD 110 Dream DX, Livo and CB Hornet 160R, stood at 142,702 units, up by 27 percent YoY.

In an attempt to fight back in the 125cc commuter segment, HMSI, which has been dealing with capacity constraints for its new CB Shine SP model, is now planning to boost the same at its Bangalore facility in the coming months. Speaking to Autocar Professional recently, YS Guleria, senior vice-president, sales & marketing, HMSI,said: “We had production capacity restrictions for the CB Shine models as we had to prioritise other models from our assembly lines. We are aware of our new position in the 125cc motorcycle segment and we plan to boost our capacity for the new CB Shine SP model at the Bangalore plant soon.”

It is known that Hero’s Glamour and Honda’s CB Shine models have been fiercely competing for the top spot in their segment, and lately the former outsells the latter in the domestic market.

Honda has recently started rolling out scooters on the second assembly line at its scooter-only Gujarat plant, doubling the production capacity to 1.2 million units per year at the site. According to the company management, while this is expected to bring down the order backlog of Activa scooters from an existing 25,000 units to below 20,000 units, the manufacturing capacity at the fourth plant is expected to saturate as early as September-October 2016.

“Honda’s growth in June 2016 stood at 23 percent, which is nearly three times that of the 8 percent domestic and export (2W) industry growth. What makes this more significant is that alone Honda added 78,576 new units in June 2016 and contributed an overwhelming 65 percent to total industry’s new volume addition,” quotes the company press note.

The third largest two-wheeler maker, TVS Motor Company clocked sales of 206,784 units in the domestic market for June 2016, up by 16.38 percent YoY (June 2015: 177,687 units). The sales grew on the back of surging demand for its best-selling scooter model 110cc Jupiter (family segment) and the newly launched 110cc commuter motorcycle Victor.

The Jupiter scooter, which has recently achieved landmark sales of 1 million units in 30 months of its launch, sells an average of 43,000-45,000 units per month, and is the second best-selling scooter in the industry, after the Honda Activa. The company also has been doing well in its moped sales, which is an affordable offering for workers in the rural and semi-urban markets. TVS Motor sells an average of more than 70,000 units of XL Super moped every month.

Bajaj Auto bets on sales momentum for FY2017

Bajaj Auto has reported domestic sales of 168,625 motorcycles for June 2016, up by 9.07 percent YoY (June 2015: 154,596 units). The company, which has the CT100 and Pulsar brand as its bestselling models in the domestic market, is witnessing a surge in the sales of its V15 model which is estimated to be selling an average of over 30,000 units a month. Its Avenger brand has also helped the company grow in its month-on-month sales.

Bajaj Auto has also recently reduced the price of its Pulsar 135LS to pitch the model directly against Hero MotoCorp’s and Honda’s best sellers in the 125cc motorcycle segment. While this is expected to boost the sales of its smallest Pulsar model on one side, reports suggest that the company is also working on new models in the 110cc-125cc city-commuter segment to boost sales in the coming months.

On the premium side, it plans to commercially roll out the biggest model in the Pulsar family, which is expected to be based on the KTM-derived single-cylinder, 375cc engine. The incoming model, named Pulsar CS 400 and first unveiled by the company at 2014 Auto Expo as a concept, will further enhance Bajaj Auto’s position at the premium end.

Sources aware of new decisions taken by the senior management indicate that the company may have postponed the new model launches under its KTM brand for 2017.

“On an overall market momentum front, the company is understood to be looking at banking on the monsoons and the potential of its recently launched models including the V15 and the Avengers. The big Pulsar is expected to draw crowds around the festive season, and Bajaj Auto may or may not launch a facelift / new model in the commuter category this year. The new incoming models under the KTM brand seem to be postponed for 2017 as of now. It’s a clever strategy to not open up all cards in quick succession,” revealed a source, requesting anonymity.

June a good month for Yamaha, Royal Enfield

India Yamaha Motor has reported total domestic sales of 67,203 units (including Nepal territory) for June 2016, up by a healthy 30.66 percent YoY. The company had posted sales of 51,432 units in June 2015. The growth comes on the back of persistent dealership penetration across the country along with timely roll out of new models and facelifts.

The company has recently rolled out the 110cc Saluto RX commuter motorcycle along with an all-new variant of its existing 113cc Ray scooter (Ray-ZR) and a front disc brake version of its family scooter – Alpha.

Meanwhile, its existing bestsellers – Fascino scooter and 150cc FZ series – continue to contribute to overall sales. The company has set itself a target of establishing 3,000 touch-points within the ongoing year. It has an existing pan-India network of 2,200 dealerships and sales and service centres.

Commenting on the company’s performance for June 2016, Roy Kurian, vice-president, sales & marketing, Yamaha Motor India Sales said, “In the first half of 2016, Yamaha etched a remarkable growth trend along with the introduction of new two-wheelers for urban onlookers and non-urban commuters. The new Cygnus Ray-ZR and Saluto RX along with the Fascino, FZ series and R series is ready to take on the market and Yamaha is spot on as it caters to various needs of Indian two-wheeler buyers. Yamaha will also continue to focus on customer-centric activities.”

Continuing with its strong market performance, Royal Enfield posted sales of 49,060 units during June 2016, growing by 34.05 percent YoY. It had clocked sales of 36,597 units in June last year. The company, which has recently tied up with e-commerce player, Flipkart, to boost its merchandise and riding gear sales, is understood to be ramping up the monthly production capacity of its recently launched adventure touring model, the single-cylinder, 411cc, Himalayan.

Autocar Professional estimates that Royal Enfield has sold more than 1,800 units of the Himalayan, which was launched around mid-March 2016 with a phase-wise retail strategy. Market experts say that the company has been successful in garnering early sales of this new model.

Boosting its R&D capabilities, the company has earmarked Rs 600 crore for new product development along with production capacities. In a recent press note, Siddhartha Lal, managing director and CEO, Eicher Motors, had said: “Royal Enfield has been investing in building strong foundations across all areas of its business. We will be investing Rs 600 crore towards product development, setting up of the two technical centres, in Leicestershire, UK and Chennai, India, enhancing our manufacturing capacity and market development activities across geographies.”

The two-wheeler OEMs have been able to carry forward their sales momentum and with the industry remains optimistic with the onset of monsoons and the festive season. 

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