January two-wheeler sales bring hope to OEMs but petrol price rise could be a spoilsport

by Sricharan R 05 Feb 2021


Like the passenger vehicle industry in India, the two-wheeler industry is not out of the woods yet. Actually far from it, even as it rides out of the Covie-induced lack of demand for most of the first 10 months of fiscal year 2021. 

Between April-December 2020, the domestic two-wheeler industry saw total sales of 1,07,65,788 units, down a substantial 22.63% year on year. All three sub-segments are down: Motorcycles at 71,99,152 units down by 19.60%, scooters with 31,03,112 units is down by 30.48% and mopeds with 462,107 units down by 6.77%. 

Given this situation, January numbers for six OEMs which announced their despatches/sales indicate there is some momentum which could pick up pace albeit the high and wallet-busting price of petrol across the country could prove to be a spoilsport. It also means OEMs could push sales of their fuel-sipping models which stretch every litre of expensive fuel to the maximum.  Here's looking at the top performers in January-

Hero MotoCorp: 467,776 units / - 4% YoY
Hero MotoCorp started the new year on a high note with its 100 millionth bike, Xtreme 160R rolling out of its Haridwar facility. The world’s largest two-wheeler manufacturer sold 467,776 units in the domestic market clocking 5% growth month on month (December 2020: 447,335 units) but down 4% YoY in January (January 2020: 488,069 units). The two-wheeler major sold a total of 485,889 units including exports. This sales figure includes 449,037 motorcycles and 36,852 scooters. 

Last month Hero enter into a distribution agreement with Grupo Salinas, founded by Mexican entrepreneur Ricardo Salinas to form one of the largest distribution networks globally to sell competitive, high-quality products in the Mexican market. Hero MotoCorp will launch nine products across various segments there.

Honda Motorcycle & Scooter India: 416,716 units / 11% YoY
Honda closed the first month of the new decade with 11 percent rise in domestic sales. A total of 416,716 units (January 2020: 374,114 units). On a M-o-M basis, it has grown 72 percent (December 2020: 242,046 units). Yadvinder Singh Guleria, Director – Sales and Marketing, Honda Motorcycle & Scooter said, “Honda has entered 2021 with double-digit growth. While we do foresee the low base effect to remain in play till the end of Q4 and continue into Q1 of FY2022, we are hopeful that colleges reopening, ongoing Covid-19 vaccination drive and stronger urban demand will act as a tailwind for domestic two-wheeler demand recovery.”

Last month saw HMSI launch two new models, 2021 Africa Twin Adventure Sports and Grazia Sports Edition. Also, Honda inaugurated three new BigWing showrooms in Hyderabad, Ahmedabad and Ludhiana. With this, Honda’s premium motorcycle business has now expanded to five Honda BigWing Topline (for the entire premium motorcycle range starting 300cc) and 15 Honda BigWings (for 300-500cc mid-size premium motorcycle).

TVS Motor Co:  205,216 units / 26%
Chennai-based TVS Motor Company sales grew 26% to 205,216 units i(January 2020: 163,007 units). On a month-on-month basis, the bikemaker clocked 16 percent growth (December 2020: 176,912 units). This sales number includes 136,790 motorcycles and 98,319 scooters. Its exports have risen 56 percent. The company said, “Despite scarcity in availability of containers, the demand in the export market continues to be robust.”

Bajaj Auto: 157,404 units / 0% YoY
Pune-based Bajaj Auto sold 157,404 units in January, more or less similar to what it  sold in last January (January 2020: 157,796 units). On a month-on-month basis, the company posted a 22 percent growth (December 2020 sales at 128,642 units).

The company’s exports registered a 30 percent growth, which is their highest ever. They have exported around 227,532 units in January compared to 174,546 units in January 2020.

Royal Enfield: 64,372 units / 5%
Royal Enfield sold 64,372 units in January 2021, posting 5 percent growth YoY (January 2020 sales: 61,292 units). However, on a MoM basis, it saw a decline of 2% (December 2020 sales: 65,492 units). The company’s exports jumped 103% in January 2021 at 4,515 units (January 2020: 2,228 units).

On january 29, the bikemaker opened its first showroom in Japan in Tokyo. where it will retail five models: he standard street model, the Bullet 500; the retro street model, the Classic 500; the versatile adventure tourer, the Himalayan (411cc), the quintessential modern-classic roadster, the Interceptor 650, and the cafe racer, the Continental GT 650

Yamaha Motor India: 55,151 units / 54% 
Yamaha Motor India's sales increased by 54 percent YoY to 55,151 units (January 2020: 35,913 units). On a M-o-M basis, sales are up 49% (December 2020: 39,224 units). The company has been reporting consistent sales growth after lockdowns were lifted from July 2020. Yamaha is also gearing up with its retail and product strategies to increase sales.

Growth outlook 
While the other 10-odd OEMs have not officially released their January sales data, suffice it to say that their growth should be in single digits or entering double digits. While demand from rural India is back, particularly for commuter motorcycles, the scooter segment continues to feel the heat due to the absence of sustained demand from urban India, which still has a large working population working from home. 

What's not helping the two-wheeler cause, as well as the rest of the industry, is the sharp spike in petrol prices. In a little over 10 months, the price of petrol in Mumbai has risen by Rs 18 a litre. On April 1, 2020, petrol cost Rs 75.28 a litre on April 1, 2020, At February 4's rate of Rs 93.20, it translates into a 24% price increase. 

These wallet-busting fuel prices are hitting the Indian motorist – on two-, four and more wheels – very hard. For instance, the owner of a fuel-sipping commuter motorcycle like the Hero Splendor, which has a 11-litre tank, would have paid Rs 828 to tank up on April 1,2020 in Mumbai. Today, he pays Rs 1,025.20 – which is Rs 197.20 more – to go the same distance.

So, even as OEMs await good times, there are a number of dynamics in India's overall macro-economic situation which can make or break numbers.