Hero Honda Dips On Reports Of Inventory Pile-up

Mumbai, December 23: | Updated: Dec 24 2002, 05:30am hrs
Hero Honda declined following reports that the company has large amounts of unsold inventory.

On The Stock Exchange, Mumbai (BSE), the stock of the two-wheeler major closed at Rs 280, as against its previous close at Rs 274.05. A total number of 1,06,394 shares of Hero Honda were traded on Monday.

As per dealers, the company has huge piled up inventories at the dealers level, in excess of over 1.6 lakh motorcycles.

Dealers also opined that sluggish sales in December 2002 have prompted a pile-up in inventory. Analysts, however, said that the real impact of the monsoon is being reflected on the companys sales now. In this backdrop, analysts are sceptical about the company achieving its growth target of 18 lakh motorcycles in the financial year, 2002-03.

Analysts further opined that competition is another factor weighing down sales.

The price war is expected to heat up further in the coming months between Hero Honda and its rivals Bajaj, TVS, Kinetic and Yamaha in the motorcycle segment. However, larger volumes and cost-cutting exercises should see growth in the automobile sector, analysts also added.