Two-wheeler sales in June down 27% but better times likely in FY2021

The onset of a normal monsoon and pent-up demand should provide the fillip for improved numbers down the line.

By Shahkar Abidi calendar 02 Jul 2020 Views icon9558 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Two-wheeler sales in June down 27% but better times likely in FY2021

Being the most affordable form of motorised transport, it is not surprising that the two-wheeler segment should be the first to see some green shoots of recovery. From the June 2020 sales numbers released by leading OEMs, it seems to be clear that rural demand is leading the way. The onset of a normal monsoon and pent-up demand should provide the fillip for improved numbers down the line.

Hero MotoCorp: 450,744 units (-26.8%)
The country’s largest two-wheeler OEM  reported despatches to dealerships of  450,744 units. While this is a record sequential growth of four times over the previous month (May 2020:  112,682 units) and not really a good comparison, the numbers are down 25% YoY (June 2019: 616,526).

Commenting on the numbers, Dr Pawan Munjal, chairman and CEO, Hero MotoCorp, said:  “We have demonstrated phenomenal leadership quality and tenacity to clock a sharp vertical growth in our sales at a time of massive disruption and uncertainty. This is an overwhelming reiteration of the enduring trust and faith that our customers repose in Brand Hero. Sale of over 450,000 two-wheelers in a highly disrupted month is also a clear signal of the resilience of the Indian economy to be able to revive in the face of any adversity. This has vindicated our strong belief in the robust fundamentals of the Indian economy. 

Q1 FY2021 sales were subdued due to the impact of Covid-19 and the effects of the closure of the plant operations and the retail outlets through April and most of May. Hero MotoCorp sold a total of 563,426 motorcycles and scooters in the April-June 2020 period.

TVS Motor Co: 144,817 units (-36%)
Chennai-based TVS Motor's domestic  total sales dropped 36 percent year on year to 144,817  units in June 2020 (June 2019: 2,26,279 units). The company has resumed its operations in a graded manner across all its factories in Hosur, Mysore and Nalagarh.

According to a company statement, “The market is opening up gradually post the lockdown, and we are witnessing a positive uptake in both domestic retail as well as exports.” TVS Motor added that the company faced supply chain constraints in June, some of which got resolved in the same month and it is expecting to overcome the rest in July.

In Q1 FY2021, TVS sold a total of 255,000 two-wheelers, down 71% (Q1 FY2020: 884,000).  

Bajaj Auto: 146,695 units (-26%)
Bajaj Auto’s sales went down by 26 percent to 146,695 units (June 2019: 1,99,340 units). Similarly, exports fell by 29 percent to 1, 08,427 units (June 2019: 1, 51,951 units).

On YTD basis, during the period from April-June 2020, domestic sales went down by 70 percent to 1,85,981 units ( April-June 2019: 6,10,936 units). Likewise, the export fell down by 55 percent during the same period to 2.13,948 units (April-June 2019: 4, 71,691 units).

Royal Enfield: 36,510 units (-34%)
Royal Enfield saw its domestic sales going down by about 34 percent to 36,510 units in June (June 2020: 55,082 units). Likewise, the company also saw its exports declining by 52 percent to 1,555 units when compared to 3257 units in June last year.

The road ahead
While the lockdown gets relaxed, the government will have to chip in with favorable policies and incentives to drive the demand in coming months. Also, though the challenges of the supply side have been solved to a considerable extent, hopefully it should get further eased in July.

ALSO READ: Passenger vehicle sales in June down 54% but recovery sharper than expected

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