Two-wheeler sales down 26% in October as entry level buyers stay away

The news is not good for the two-wheeler segment. In October 2021, as per sales data accumulated from six major OEMs, a total of 14,77,313 units were sold, down a substantial 26% year on year (October 2020: 19,85,690). Month-on-month growth was a marginal uptick of just one percent.

Much of the blame for the poor show can be attributed to the continuously soaring prices of petrol which has crossed the Rs 100-a-litre mark across the country. The mass-market commuter motorcycle market, which typically delivers the goods to OEMs in a good month, has felt the heat of soaring fuel prices which have kept buyers away.  And a fair portion of these buyers would be from rural India. Here’s looking at how the six OEMs fared.

Hero MotoCorp: 527,779 units / -33%
Hero MotoCorp, which current has a 35% share of the overall two-wheeler market, sold 527,779 units in the domestic market last month, a marked 33% sales declines on a YoY basis (October 2020: 791,137). Nonetheless, there was month-on-month growth with 22,317 units sold more last month, and marking a 4% increase (September 2021: 505,462).

With the festive season underway, Hero MotoCorp will be putting its shoulder to the retail wheel to ensure sales are up this month. The company launched the new Pleasure+ 110 scooter at Rs 61,900 in early October  and followed it up with the Xtreme 160R Stealth Edition and XPulse 200 4 Valve.

Wwith the economy gradually opening up along with other positive growth indicators such as encouraging farm activity and surge in preference for personal mobility, a swift revival in sales is expected in the coming months.

Honda Motorcycle & Scooter India: 394,623 units / -20%
Honda Motorcycle & Scooter India (HMSI), with total sales of 394,623 units, saw numbers decline 20% last month (October 2020: 494,459). Things were no better on a month-on-month basis – down 15% – given that it had sold 463,379 units in September 2021.

Commenting on the sales performance, Yadvinder Singh Guleria, Director, Sales & Marketing, HMSI, said: “With the much-awaited festival season in progress, we are witnessing a gradual rise in engagement registering more enquiries from prospective customers with each passing day. We expect this auspicious period to amplify the positivity in terms of conversions.”

October 2021 was a milestone month in terms of achieving 5 crore cumulative domestic sales in India since the start of its sales operations in 2001. HMSI, which has a 26% overall two-wheeler market share, is gradually enhancing its focus on its midsize bikes. The company inaugurated new Honda BigWing outlets in Aluva, Mangalore (Karnataka) and Worli, Mumbai (Maharashtra) last month.

TVS Motor Company: 258,777 units / -14%
TVS Motor Co, the No. 3 player with a 14.24% market share, sold a total of 258,777 units last month, down 14% YoY (October 2020: 301,380). However, compared to both Hero MotoCorp and HMSI, TVS fared better month on month – up 6% versus September 2021’s sales of 244,084 units.

It is learnt that two of its recently launched products – the Raider 125 and Jupiter 125 – are witnessing strong traction in the market, which could be put down to the gradual market shift from 100cc commuters to those with more power.

Bajaj Auto: 198,738 units / -26%
With the domestic two-wheeler market continuing to show iffy sales trends, the Pune-based motorcycle manufacturer sold a total of 198,738 bikes in October 2021, down a substantial 26% year on year (October 2020: 268,631).

Also, continually rising and wallet-burning prices of petrol are also proving to be a spoilsport for the company and its rivals. October 2021 saw the price of petrol rise by Rs 7.55 a litre in Mumbai or by 6.99% in just 31 days. The price-sensitive entry-level commuter market is the first to be affected by fuel prices rises and like other OEMs, Bajaj Auto too is feeling the heat.  The executive motorcycle segment though remains relatively unaffected.   

Exports numbers, at 1,92,565 units and just 6,173 units less than the domestic market total, constituted a 5% YoY decline for the company (October 2020: 201,659). Combine domestic and export sales and what you get is a total of 391,303 units for October 2021, down 17% YoY (October 2020: 470,290).

In terms of sales for the first seven months of the ongoing fiscal year (April-October 2021), Bajaj Auto has sold a total of 10,29,438 units in the domestic market, up 2% (April-October 2020:  10,04,806). On the export front, the numbers are robust: 12,91,085, up 56% YoY (April-October 2020: 829,878). Cumulative domestic and export sales are 23,20,523 units, up 26% YoY ((April-October 2020: 18,34,684).

Royal Enfield: 40,611 units / -35%
Royal Enfield sold 40,611 motorcycles last month as against 62,858 units in October 2020, marking a sharp 35% year-on-year decline. Month on month, the Chennai-based manufacturer posted robust 49% growth with 13,378 more units sold in October (September 2021: 27,233). The new Classic 350, launched on September 1 with upgraded engine, chassis and a host of new features, is apparently finding much favour among midsized motorcycle enthusiasts across India.

Suzuki Motorcycle India: 56,785 units / -16%
Suzuki Motorcycle India, which sold 56,785 units last month, registered a YoY sales decline of 16% (October 2020: 67,225). In terms of month-on-month growth, Suzuki posted a 2% increase, selling an additional 1,177 units in October 2021 (September 2021: 55,608).

Growth outlook a tad worrying
Unless and until fuel prices are reduced, overall sales numbers in the two-wheeler segment will continue to remain under pressure. The high double-digit sales decline in October is worrying. According to Rohan Kanwar Gupta, VP & Sector Head, Corporate Ratings, ICRA, this reflects the continuing impact of increasing cost of vehicle ownership and rampant fuel price hikes on consumer sentiments. 

“The volumes also reflect some impact of extended supply chain disruptions (semiconductor chip shortages) on the production of high end (>150cc) two-wheelers. Nonetheless, a sequential growth in domestic wholesale volumes indicates some revival attributable to the festive season. This is in line with the retail registration data, which also saw a 9% sequential growth in October 2021, with volumes touching 990,000 units. A healthy pace of vaccination leading to abatement of fear regarding further waves of infection, decent farm cash-flows and preference for personal mobility are expected to support volume recovery in the near-term even as elevated cost of ownership continue to pose a risk,” added Gupta. 

With the pent-up demand in the two-wheeler market done and dusted, OEMs are cautiously optimistic that the gradual opening up of town and country will bring positive news in the form of sales. We will keep you updated on that score.