Two-Wheeler Sales Drop Low For August

So far in FY13, Honda Motorcycle and Scooter India (HMSI) was driving the overall two-wheeler growth. In Q1FY13, for every 10 two-wheelers sold over the corresponding quarter in the previous year, 6.5 were Honda. In August 2012 though, the scene changed a little with an overall slowdown in the two-wheeler industry. HMSI, that had been growing YoY in the range of 45.53 per cent and 56.90 per cent for every month of FY13, slowed (relatively!) to 38.65 per cent in August. Motorcycles and scooters grew at 69.44 per cent and 19.52 per cent respectively.

In the month of August, among the top four players in the industry, weakness can be seen on all fronts in domestic sales. Though Bajaj has managed to turn their consistently and gradually declining performance into a strong 16.10 per cent, it’s largely on the back of strong exports which are seen growing at 40.22 per cent. This has been a month of turning around for the company.

Hero Motors announced disappointing figures for the month with a decline in YoY growth at 11.88 per cent. Since Hero doesn’t disclose a break-up of sales figures for each segment, it’s not possible to boil down to key points behind this decline. The underdog, TVS Motors, has been consistently underperforming. Sluggishness can be seen in every segment of the company’s sales. The volumes for motorcycles, scooters and three-wheelers have seen negative growth of 30.95 per cent, 26.91 per cent and 17.12 per cent respectively. The total sales growth for the company has been the worst in this financial year, clocking -20.65 per cent. In the earlier months, it was in the range of -15.10 per cent and 4 per cent, increasing the need for a game changer, and soon.

Smaller players though, like Suzuki Motorcycle India Private Limited (SMIPL) and Yamaha Motor, have benefited on account of a smaller base. SMIPL reported a 35.77 per cent increase in sales at 36,254 units in August 2012 as compared to 26,900 units in August 2011. Yamaha too gained a hefty 29.64 per cent increasing sales from 30,461 in August 2011 to 39,490 in August 2012.

Overall, the two-wheeler sales look gloomy for August. Regardless of the continued outperformance of HMSI over the last few months, the slowdown is visible and evident. Though sales are expected to pick up with the beginning of the festive season, macro economic conditions are still not in favour of a consistent and sustained growth rate.