Two-wheeler sales on a weak wicket

The two-wheeler sales for March and FY22 continue to reflect the challenges in the entry-level commuter bike segment. Most motorcycle manufacturers are still in a fragile state.

Demand from rural India, the biggest buyer of fuel-efficient commuter bikes, is yet to pick up and in urban India, buying sentiments have yet to recover fully from the impact on incomes. Retail financing for the segment is also another matter of concern. The premium bike segment, however, is showing significantly better traction. However, in this premium segment too, the semiconductor shortage is a key worry.

Hero MotoCorp: 415,764 units / -22%
Hero MotoCorp sold 450,154 units in March 2022, down 22 percent YoY compared to 524,608 two-wheelers sold in March 2021. On a month-on-month basis, however, there has been significant improvement in the sales. The March numbers are 25 percent higher than 358,254 two-wheelers dispatches in February. The company is hopeful of building sales momentum, going forward in FY23. The highlight of March sales were the highest annual premium motorcycle retails in the past 5 years and highest ever Xpulse retails at 5348 units in March. The two-wheeler maker also recorded strong recoveries in Glamour sales with the highest ever monthly sales in March for any non-festive month during the year. For FY22, Hero MotoCorp sold 49, 44,150 units of two-wheelers compared to 57,91,539 units in FY2021, down 14 percent. 

Bajaj Auto: 107,081 units/-41%
Bajaj Auto’s domestic two-wheeler sales are down 41 percent in March at 107,081 vehicles compared to 181,393 units sold in March 2021. For the financial year FY2022 as well, two-wheeler sales are 9 percent lower at 1,641,084 vehicles compared to 1,809,375 units sold in FY2021. Exports for the full fiscal, however, grew 22 percent to 2,195,772 units compared to 1,796,518 vehicles exported in FY2021 clearly indicating that Bajaj’s focus on growing exports is paying off in the face of poor demand in the entry-level motorcycle market locally. However, March exports specifically are flat, though a tad higher at 149,243 vehicles compared to 148,740 vehicles exported in March 2021.

Honda Motorcycle & Scooter India: 309,549 units / -22%
Honda Motorcycle & Scooter India recorded sales of 309,549 units in March 2022, down 22 percent year on year but up slightly from 285,677 units sold in February. For the fiscal year, total sales of 37,99,680 two-wheelers which includes domestic sales of 34,68,828 units and exports of 3,30,852 units. This is a 7 percent drop from the previous fiscal where they sold 40,73,182 motorcycles. Yadvinder Singh Guleria, Director, Sales a Marketing, HMSI,  said, “Despite signs of moderation, the year continued to impact business momentum due to varied challenges arising from both demand and supply side.”

TVS Motor Company: 196,956 units / -2.5%
TVS Motor Company’s sales were down by 30 percent in March 2022 compared to 281,714 units in February 2022. On a year-on-year basis, the decline was marginal, less than 3 percent compared to 202,155 units were sold in March 2021. The total sales include 160,522 motorcycles and 94,747 scooters for March 2022.

Two-wheeler exports were around 95,962 units in March 2022 as against 105,242 vehicles exported in March 2021. For the fourth quarter of FY22, sales for the two-wheeler maker slipped 8 percent to 815,000 units as against 887,000 units registered in the year-earlier quarter of FY21.

“The shortage in supply of semiconductors have impacted the production and sales of premium two-wheeler. We are cautiously optimistic that the supply of semiconductors will improve in the coming months,” the company said.

Suzuki Motorcycle India: 50,734 units / -16%
Suzuki Motorcycle India recorded sales of 50,734 units in March 2022, a 13 percent decline on a month-on-month basis and down 13 percent year-on-year. For the fiscal, the company sold 754,938 units in FY22 as compared to 591,846 in FY21. Satoshi Uchida, Managing Director, Suzuki Motorcycle India said, “It is quite satisfying that despite the challenges induced by Covid and supply chain issues, we successfully registered a sales growth of 27.6 percent in FY2022. This growth reflects that our products have been well received by our consumers. Additionally, the sales response on our recently launched scooter, Avenis has been overwhelming.”

Royal Enfield: 58,477 units / -3%
Royal Enfield’s March sales stood at 58,477 units as against 52,135 units in February 2022, a 12 percent growth. Compared to the previous year, there was a 3 percent drop from 60,173 units sold in March 2021. The recent launch of Scram 411 is expected to further boost the company’s sales in the coming months.

FY23 outlook
The impact of the Ukraine war which has led to an increase in fuel prices and which will only stoke inflationary pressures will impact household budgets, which in turn will affect buying sentiments in the two-wheeler segment.

The forecast on this year’s monsoons will also have to be factored in, typically poor rains will impact rural incomes that are already fragile and are yet to recover from the full impact of the Covid-induced job and income losses.

As one Chennai-based dealer puts it,” The footfalls keep fluctuating. But the continuous fuel price hike will impact sales further as only those who have a steady job and incomes will be able to buy a two-wheeler.”

From a production perspective supply side issues including semiconductor shortages will mean that two-wheeler OEMs will have to closely monitor an evolving situation.

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