Two-wheeler OEMs open FY2018 on a happy note
April 2017 marks the closest-ever sales gap – less than 40,000 units – between Hero MotoCorp and Honda Motorcycle & Scooter India even as other OEMs report an uptick in monthly numbers.
The top seven two-wheeler manufacturers have reported total domestic monthly sales of 16,74,322 units for April 2017, which marks a year-on-year (YoY) of 7.25 percent (April 2016: 15,61,206).
Barring the home-grown Hero MotoCorp and Bajaj Auto, all other two-wheeler players have opend the new fiscal on a positive note. Honda Motorcycle & Scooter India (HMSI) stands out as the biggest gainer, adding 137,849 units to its April 2016’s sales to notch an impressive 33.29 percent YoY jump.
April 2017 also stands out in the context of the rivalry between the top two players. Autocar Professional understands that Honda has recorded its best-ever monthly sales, and its April 2017 sales are the closest to those of arch-rival and industry leader Hero MotoCorp. The monthly sales of these two two companies, also erstwhile partners, typically remain within a comfortable gap of 100,000-125,000 units or more; July 2016 was a rare month when Honda’s sales were 91,000 units behind Hero MotoCorp.
For April 2017, while Hero has reported sales of 591,306 units (including exports), Honda has recorded sales of 551,884 units, which clearly indicates that the latter has come very close to the industry leader. Honda trails by only 39,422 units to Hero’s monthly sales in April.
New trends in the domestic two-wheeler segment are defining new market dynamics wherein aggressive companies are eating into the market shares of their rivals. Rapid scooterisation is one of the biggest examples that clearly highlights the emergence of TVS Motor Company as the third largest two-wheeler player in India, surpassing Bajaj Auto in FY2014-15. Honda’s monthly sales reaching arm’s-length to that of Hero’s is yet another example.
In its official release, Hero MotoCorp maintains that the trend of robust sales will continue in May 2017 as well due to the ongoing marriage season. Hero MotoCorp, which has been recently acknowledged as the Indian MNC of the year by the All India Management Association (AIMA) for expanding its operations globally, has raised the prices across its portfolio in the range of Rs 500-Rs 2,200.
Honda, on the other hand, has crossed the 550,000 unit monthly sales milestone for the first time. According to the company, the rapid growth is driven by sales of its automatic scooter brands, which at 368,618 units in April, crossed the 350,000 units milestone for the first time. On the motorcycle front, Honda sold 183,226 units last month, up by 22 percent.
In FY2016-17, as per SIAM data, Hero had a market share of 36.86 percent and, inching closer by the year, Honda had 26.86 percent. Following its strong sales in April, HMSI now claims that its market share stands at 33 percent, its highest ever.
With new president and CEO, Minoru Kato at the helm of affairs, HMSI is now gunning for a sales target of six million units in the ongoing fiscal.
Commenting on the record sales in April 2017, Yadvinder Singh Guleria, senior vice-president (Sales & Marketing), HMSI said: “April 2017 results mark a great entry for Honda into the new financial year. Honda sold a total of 578,929 two-wheelers with 34 percent growth on the back of customer demand for Honda’s upgraded BS IV portfolio. In the domestic market, Honda two-wheeler sales increased 33 percent to all-time high of 551,884 units with 33 percent market share for the first time ever. Within segments, automatic scooter sales led the momentum with 40 percent growth to cross the 350,000 mark for first time ever (368,618 units), while motorcycles sales recorded robust 22 percent growth. Not only domestic but exports also saw a jump of close to 60 percent over April 2016.”
Continuing to grow, albeit conservatively, TVS Motor Company reported YoY growth of 3.96 percent with sales of 205,522 units in April 2017. At 81,443 units (including exports), scooter sales grew by 28.6 percent in April 2017 (April 2016: 63,341). Motorcycles, on the other hand, marked a growth of 10.4 percent YoY for the last month at sales of 99,890 units (including exports). The company had dispatched 90,491 motorcycles in April 2016.
Autocar Professional recently reported that TVS Motor has now become India’s second largest scooter player (after Honda) for a complete financial year for the first time in FY2016-17. It surpassed Hero MotoCorp by a thin margin to achieve a market share of 14.74 percent in the domestic scooter segment during the last fiscal.
Hero MotoCorp’s scooter market share, on the other hand, stood at 14.10 percent for the same period. Notably, TVS Motor’s Jupiter’s scooter brand has played an instrumental role in helping the company achieve this feat.
At number four is Bajaj Auto, which has reported sales of 161,930 units in April 2017, down by 19.21 percent YoY (April 2016: 200,433). Its exports, however, have registered good growth of 44 percent YoY with sales of 132,002 units last month (April 2016: 91,465).
Bajaj Auto has had a good run in the last fiscal when it returned to cumulative sales of more than two million units after three years. The company’s aggressive product positioning and strategy resulted in strong sales from its Pulsar, CT100, Platina, Bajaj V and Avenger brands during the last fiscal. The company is also moving aggressively in the midsized motorcycle segment, now with the Dominar 400 and new KTM models (Duke 200, Duke 250 and Duke 390)
India Yamaha Motor sold 68,827 units in April 2017, up by 7.66 percent YoY (April 2016: 63,927). Yamaha is targeting total domestic sales of one million units in CY2017 and a share of 10 percent in the scooter market this year. To do so, the company is aggressively expanding its footprint in Tier 2 and 3 towns, and has recently launched its locally manufactured quarter-litre FZ 25 motorcycle in the domestic market. According to the company officials, the model is being received well in the domestic market.
Commenting on the company’s sustained growth, Roy Kurian, senior vice-president (Sales & Marketing), Yamaha Motor India Sales said, “The sale numbers bear testimony to Yamaha’s focus in growth, regardless of circumstantial challenges like what the industry recently confronted with the ban on BS III inventory. As the company is eyeing one million sales in 2017, it has introduced the FZ 25 streetbike to cater to the premium segments that mostly dominates the urban market. On the other hand, the company will remain vigilant to Tier 2 and Tier 3 markets that could see reasonable surge in scooter sales.”
Continuing its month-on-month growth, Royal Enfield has registered domestic sales of 58,564 units in April 2017, up by 24.51 percent YoY (April 2016: 47,037). Including exports, which stood at 1,578 units (up by 36 percent YoY), the company crossed the 60,000 unit mark for the first time in a month to hit 60,142 units.
The company has recently ventured into the Brazilian market, which is also touted as the fourth largest two-wheeler market in the world after China, India and Indonesia. After Royal Enfield North America (RENA), the company has set up its second direct distribution subsidiary outside India, in Brazil, which is headquartered in Sao Paulo. Royal Enfield Brazil will be responsible for sales of motorcycles to local dealers, and other support activities including marketing and aftersales.
Royal Enfield’s selective global expansion is in line with Siddhartha Lal’s ambition of making the company as the world’s largest in the midsize motorcycle segment.
Suzuki Motorcycle India has reported sales of 36,289 units in April 2017, up by 43.19 percent YoY. The company is riding on the strong performances of its 125cc Access 125 scooter and its 150cc Gixxer motorcycle portfolio. Notably, the scooter sales constitute lion’s share in Suzuki’s monthly numbers.
On the premium motorcycles front, the company has grown well in the superbike segment in FY2016-17, as a result of local assembly operations of its iconic Hayabusa model. The company reported sales of 253 units in the 800cc and above categories during FY2016-17 as against sales of 149 units in FY2015-16. Suzuki has just added another two models to its litre-class line-up with the GSX-R1000 and GSX-R1000R. This is estimated to further consolidate Suzuki’s growing foothold in the superbike segment.
With a normal monsoon expected in the coming months, industry experts anticipate a good run ahead for the two-wheeler industry.
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