Slowing rural demand in India impacts motorcycle sales in June

Slowed-down demand from rural markets, low sentiments and delayed purchases continue to mar overall sales of the motorcycle segment, which constitutes nearly 70 percent of the overall two-wheeler market in India.

June 2015 sales results reveal that the big four – Hero MotoCorp, Honda Motorcycle & Scooter India (HMSI), Bajaj Auto and TVS Motor Company – have posted positive numbers. But the notable development is Bajaj Auto, which has finally shown a year-on-year growth after eight months. September 2014 was the last month when the Pune-based motorcycle maker had shown a YoY monthly growth of 7.14 percent. Among other OEMs, Yamaha and Suzuki continue to improve on their monthly numbers.

Posting flat growth of 0.14 percent in June 2015, the largest two-wheeler seller, Hero MotoCorp sold 542,362 units (June 2014: 541,594). An official communication states “As the industry had built up stocks due to the sluggish market, HMCL reduced inventories in Q1. The company’s retails are currently better than dispatches,” which means that Hero has been working on reducing its accumulated stock at the dealership as well as the factory level.

Hero rolled out two models – Passion Pro and Xtreme Sports – recently to boost its regional sales in the motorcycle portfolio. While the company has planned a number of launches during the next four-five months, it is also looking at adding a few new export destinations this fiscal.

Honda Motorcycle & Scooter India has shown decent domestic growth of 7.24 percent during June 2015, but this has come on the back of its rising scooter sales year-on-year. The company, which had sold 309,374 units in June last year, sold an overall 331,782 units last month.

HMSI’s motorcycle sales are sharply slowing down and June 2015’s 112,132 bike sales are down 21.47 percent (June 2014: 142,782 motorcycles). However, countering this fall in volume, its scooter portfolio has notched 31.85 percent growth selling 219,650 in June 2015 (June 2014: 166,592). Notably, the company has, including its export volumes for Q1 FY2015-16, crossed one-million units mark for the first time. Between April-June 2015, HMSI has sold 1,056,810 units, which includes its domestic as well as export sales.

The company, which has recently rolled out the 2015 editions of its Activa and Aviator scooter models, is increasingly focusing on making India its largest contributor to its global sales.

At the launch event recently, Keita Muramatsu, president and CEO, HMSI and Honda Motor India, said: “India is a focus market for Honda and it is significant that Honda’s two-wheeler operations in India is the second largest contributor to Honda’s global sales. Today, one in every four two-wheelers sold by Honda worldwide is from India. I am confident that given our continued investment and growth, we will become No. 1 two-wheeler market for Honda globally within the next 2-3 years. Honda’s future growth in India will be co-driven by its scooter portfolio. Honda dominates this segment with every second scooter being sold today in India being a Honda. At the same time, Honda is expanding its production capacity foreseeing the future potential of automatic scooter demand. Our upcoming fourth plant will be the world’s largest only scooter plant and will start operation at Gujarat in early 2016.”

Bajaj Auto, which is now witnessing the results of its multiple launches in the early months of this calendar year, registered total sales of 287,582 units (including exports) during June 2015, up 9.68 percent (June 2014: 262,202). This is thanks to the sales of its CT commuter model, which is seeing a surge in demand.

TVS Motor Company sold 177,769 units in June 2015, up 4.69 percent (June 2014: 177,769). Surprisingly, the company recorded better growth in motorcycle sales than its scooter portfolio.

While its scooter sales grew 4.99 percent to 61,241 units in June 2015, from 58,328 units in June 2014, motorcycle sales grew by 15.56 percent, increasing to 88,675 units in June 2015 from 76,734 units in June 2014. Meanwhile, the company, which is soon planning to enter into the midsized motorcycle segment, is tightly keeping its new product developments tightly under wrap.

Banking on the growth of its scooter models, India Yamaha Motor registered total domestic sales of 51,432 units in June 2015, up by 26.47 percent (June 2014: 40,666). “The numbers are a sign of Yamaha’s robust business plan and strategic customer engagement programs. We witnessed brisk growth due to our robust product line-up and new launches during the year so far. Our new Fascino scooter and 125cc Yamaha Saluto have been key to boosting our sales. Also, the new range of Alpha, Ray and Ray Z scooters with Yamaha’s next- generation ‘Blue Core’ engine concept continues to be a fundamental growth driver for us,” said Roy Kurian, vice-president – Sales & Marketing, Yamaha Motor India Sales.

Suzuki Motorcycle India sold 32,628 units, 31.50 percent up (June 2014: 24,812). Atul Gupta, executive vice-president, SMIPL, said: “Several factors have come together to propel us onto a consistent growth path. This is because of Suzuki’s marketing efforts and also the perceived upswing in consumer mood. The aggressive marketing initiatives for the Gixxer have generated a lot of excitement and interest in Suzuki’s flagship product.”