Two-wheeler sector feels the heat of demonetisation in December

by Amit Panday , 03 Jan 2017

The cash crunch, following the demonetising of Rs 500 and Rs 1,000 currency notes on November 8, is now being felt acutely in the Indian two-wheeler sector. As OEMs announce their sales numbers for December 2016, it is clear that the sector is grappling with a slowdown. What’s more, the hit could be mainly from rural India, which constitutes the bread-and-butter entry-level commuter models for manufacturers.

Hero MotoCorp (HMCL) reported sales of 330,202 units in December 2016, down 33.92 percent (December 2015: 499,665 units).

On the cumulative front, the company has registered its highest ever sales in any calendar year. It reportedly sold a total of 6,762,980 units in the calendar year 2016, which marks a YoY growth of 4.3 percent (CY2015: 6,486,103).

Also, in the context of the ongoing fiscal, Hero MotoCorp has crossed the milestone of five million unit sales during the nine-month period (April-December 2016) with 5,024,129 units sold during this period.

Bajaj Auto’s domestic sales last month stood at 106,665 units as against 120,322 units sold in December last year. The monthly volumes were down by 11 percent.

However, as regards year-to-date (YTD) numbers, Bajaj Auto’s total domestic volumes registered a growth of 11 percent YoY. The company has sold 1,587,852 units in the April- December 2016 period in the domestic market as against sales of 1,430,175 units during the corresponding period of last fiscal.

The recently launched Dominar 400 model, which was launched last month, will see the commencement of deliveries in January 2017.

TVS Motor Company has reported that its domestic two-wheeler sales stood at 153,413 units in December 2016, down 8.77 percent YoY (December 2015: 168,160).

India Yamaha Motors has recorded domestic sales (including Nepal) of 49,775 units in December 2016, up by 28 percent YoY (December 2015: 38,833). On the cumulative front, the company has registered total sales of 786,000 units in CY2016, up by 32 percent YoY (CY2015: 594,000).

It is understood that Yamaha is targeting domestic sales of one million units in CY2017, and has laid out its product strategy and capacity expansion plan accordingly. Commenting on the company’s sustained growth, Roy Kurian, vice-president (Sales & Marketing), Yamaha Motor India Sales, said, “2016 has been a landmark year for us. Yamaha managed to perform strongly in all aspects and maintained a steady sales growth across the year. This year Yamaha crossed the 100,000 sales figure first in India consecutively in two months (September and October). The continuous growth numbers are a sign of Yamaha’s robust business plans and strategic customer engagement programs. 2017 holds tremendous opportunity for further growth as Yamaha will enhance its product portfolio with the launch of new and exciting models and will intensify its network expansion plan across the country with a target of achieving 1 million sales in 2017.”

Meanwhile, continuing to register strong sales, Royal Enfield, which operates according to its order backlogs, has recorded domestic sales of 56,316 units in December 2016, marking a YoY growth of 41 percent. The company had sold 40,037 units in December 2015.

Rounding up the year, Rudratej Singh, president, Royal Enfield, said: “2016 has been a remarkable year for Royal Enfield. In February this year, we launched the Himalayan purpose- built for adventure touring that introduced a whole new category of motorcycles in India. The motorcycle has received encouraging response from our customers across the country and on the back of this confidence we launched the Himalayan outside of India in Australia and Colombia in November 2016.”

“The EU-compliant Himalayan with an EFI engine was also showcased at the EICMA auto show in Milan, Italy. Royal Enfield recently launched its first exclusive store in Australia and first exclusive gear store outside India in Jakarta, Indonesia in December,” he added.


Commenting on the company’s dealership footprint, he said: “In India, we continued to strengthen our presence adding 117 dealerships (April to December 2016), taking our total footprint to 642 dealerships across India as on December 2016. Our retail growth is a significant milestone for Royal Enfield and is a testimony of our collective focus and passion for constantly enhancing consumer experience.”

“We have continued to increase our production capacity and we have sold 488,262 units for the April to December 2016 period, growing over 36 percent YoY. Despite demonetisation, our order books continue to be well ahead of our ever increasing production capacity," he concluded.


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