April two-wheeler wholesales decline 34% due to local lockdowns, price hikes

Many major two-wheeler manufacturers are seeing a decline in month-on-month sales in April due to the rise in COVID-19 cases and states imposing temporary lockdowns again.

By:May 4, 2021 8:01 AM
Two-wheeler sales in April 2021 see a drastic drop

Two-wheeler dispatches from the factory gates of original equipment manufacturers (OEMs) declined by 34% in April 2021, month on month, on the back of local lockdowns imposed by several state governments coupled with price hikes by the manufacturers.

Two-wheeler wholesales were also affected due to the missed mini-festive and marriage season, and the second Covid-19 wave severely hitting tier-II cities, the main market for two-wheelers, according to analysts.

Nomura said in a research note that two-wheeler industry volumes were down 34% in April, below its estimate of -31%. It said companies like Hero Motocorp, which have high domestic exposure, are likely to be impacted more compared to higher export contribution companies like Bajaj Auto and TVS Motor.

The sales numbers of April 2021 were not comparable with the corresponding month of the previous year, since no vehicles were manufactured and dispatched to dealers in April 2020 due to the nationwide lockdown.

Hero MotoCorp, the largest two-wheeler player in the country, said sales in April 2021 were subdued due to the temporary closure of plant operations and retail outlets across several key territories due to the second wave of Covid-19. The company’s domestic sales declined by 37%, m-o-m.

Hero MotoCorp has decided to extend the shutdown at its manufacturing facilities across India, its global parts centre in Neemrana and the R&D facility, the Centre of Innovation and Technology in Jaipur, till May 9. Plant operations will resume on May 10. The company had earlier halted plant operations temporarily in a staggered manner for four days from April 22-May 1, in view of the rapid escalation in the spread of Covid-19.

ICICI Securities said the increase in vehicle prices in January and April owing to higher input prices, and the intermittent lockdowns across states could create challenges going ahead. The shutdowns scheduled by OEMS for one to two weeks are also likely to impact wholesales in May and could provide readjustment time for channel partners.

Honda Motorcycle & Scooter India reported a 39% decline in its domestic sales in April. With stricter lockdowns across regions, Honda prioritised the safety of all its stakeholders and controlled its dispatches to avoid inventory build-up across its network. Regional lockdowns since the beginning of April have dragged down consumer sentiments considerably. While the need for personal mobility still exists, recovery may be pushed back by a few months as staying safe at home is first priority. The company has temporarily halted production operations at its four plants since May 1 for a fortnight, it said.

TVS Motor Company said its domestic two-wheeler sales in April were lower due to lockdowns in many states. The company has reduced dealer stocks to support the channel partners and will produce to maintain adequate inventories for customer demand when it reopens. The Chennai-based auto major’s domestic two-wheeler sales were down by 35%, m-o-m.

Pune-based Bajaj Auto recorded a 30% decline its domestic two-wheeler sales in April in the domestic market, m-o-m. Bajaj Auto revived its iconic brand Chetak as a premium, stylish electric scooter last year to an overwhelming response. Bookings for the Chetak were reopened recently, and it was sold out in less than 36 hours in Pune and Bengaluru. The company plans to scale up its presence to 24 more cities in the coming year.

Motilal Oswal said two-wheeler sales were impacted due to the missed mini-festive and marriage season, and the second Covid-19 wave hitting tier-II cities hard.

Royal Enfield’s domestic sales declined by 19% in April, m-o-m. The global leader in the mid-size motorcycle segment (250cc-750cc) recently announced the launch of its all-new cruiser, the Royal Enfield Meteor 350. The motorcycle will be available in select model trims in the US in 2021.

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