Honda heroes, motorcycles and scooters holiday season release is lowest in 7 years

It is estimated that the production of the main Indian two-wheeler manufacturers, Hero MotoCorp and Honda Motorcycle and Scooters India (HMSI), fell to its lowest level in seven years in October and November.

Sales of motorcycles and scooters did not gain momentum even during the holiday months, leaving businesses struggling with a pile of unsold inventory.

The two companies account for nearly 60 percent of the domestic two-wheeler market, and skidding production volumes reinforce weak demand and the structural slowdown facing the world’s largest two-wheeler market. Companies have inventory for 45 to 55 days in their channels, according to dealer sources.

For the first time in seven years, the market leader Hero MotoCorp produced less than a million units during the holiday months. It is estimated to produce a cumulative 890,228 units in the two months compared to nearly 1.4 million units in the same period last year.

In addition to a sharp 25 percent increase in motorcycle and scooter prices over the past two years, a slowdown in rural sales, coupled with high fuel prices, has kept buyers away.

Sluggish rural sales have been attributed to agro-sentiment caused by an uneven monsoon and a delayed harvest in all areas.

In urban markets, the delay in reopening schools and colleges, job losses and pay cuts (after the pandemic hit) and prolonged work-from-home policies have affected sales, said ICRA in a recent report.

“One also cannot ignore the disruption created by electric two-wheelers, which are much easier on the wallet with all the incentives and reduced running costs,” said one dealer, adding, if one took all high and low speeds into account. Electric two-wheelers launched in the last year and a half are said to represent 4 to 5% of the market.

An analyst from a national brokerage firm agreed with this opinion. “Electric two-wheelers have started to nibble the internal combustion engine two-wheeler market. “

A spokesperson for Hero MotoCorp said the company experienced sequential growth in shipments in October 2021 compared to September 2021. While the first phase of the holiday season has been slow to take off, demand for the second phase the holiday season has seen an increase, the spokesperson added.

“After the holiday season, our inventory is five to six weeks, and with the harvest being delayed due to the late monsoon retreat in many parts of the country and the current wedding season, a resumption of the demand is expected, “he said. outside.

The company expects demand to pick up in the coming quarters thanks to improved macroeconomic indicators and immunization.

Like Hero, HMSI reduced production in the aforementioned two months. The local branch of the Japanese two-wheeler manufacturer, which produces on average more than 800,000 units, made 653,555 during the holiday months of the current year, the lowest in seven years.

YS Guleria, director (sales and marketing), HMSI, declined to comment.

Although to a lesser extent, other two-wheeler manufacturers, including TVS Motor and Bajaj Auto, cut production in October and November to align supply with weak demand and correct stocks in their chains.

ICRA Ratings estimates that national two-wheeler volumes will contract 1-4% year-on-year in 2021-2022, following a weak performance of the holiday season for the industry.

CRISIL Research also estimates that two-wheeler sales will end the year with a 3-6% year-over-year decline.

Comments are closed.