Honda Motorcycle & Scooter India (HMSI) does not expect the demand to improve in the next few months, even as the company claims its retail sales grew in double digits during the festival period in October.
Yadvinder Singh Guleria, senior VP, sales and marketing at HMSI, said the economic factors do not show any improvement and the revival of the auto industry looks difficult in near term. “There is a continued slowdown for the last 11 months and we do not see positive numbers in the next few months. It’s too early to say that things have turned around and what we saw in festival period is sustainable over long term,” Guleria said on the sidelines of the launch event of its BS VI-compliant motorcycle SP 125.
While auto sales across categories have been in the negative territory for over a year, the worst hit is the two-wheeler segment, with sales in absolute numbers shrinking every month and dealers struggling with soaring inventory. Volumes at HMSI have been subdued for over 14 months now. In the April-October period, the company’s sales tumbled over 16% y-o-y and dealers say inventory is still higher than normal of 30 days. Volumes in FY19 grew by a mere 4% y-o-y against over 22% y-o-y growth in FY18.
Guleria hopes the worst should be over, but says poor economic conditions do not look positive for the auto industry. “The economic forces are still not good and the Moody’s assessment of India’s growth does not look so positive for a quick revival,” he said.
On the issue of indefinite strike by over 2,500 workers which has led to suspension of production at the company’s Manesar plant for over a week, Guleria said the company is in talks with the workers to resolve the issue. Workers FE spoke to, however, said the management has refused to have settlement talks on the matter. The strike was called to protest against retrenchment of over 200 contractual workers last week and the company cited low production and demand as the reason for the layoffs.
The company wrote to the union members stating the normal operations will be suspended from November 11 and a notice regarding resumption of operations will be given. Workers have also been demanding Rs 1 lakh compensation for every year of service till the time of retrenchment.