Two-wheeler companies were able to sustain the sales momentum in July, mainly riding on the impact of the demand recovery they achieved in June, coupled with customer preference which seems to be shifting from aspirational to need-based. Analysts said though the July demand was encouraging and sustainable, impediments such as the inability to scale up production by companies due to restrictions and localised short-time lockdowns still cast a shadow over the sector. The June recovery was largely driven by a choice for personal vehicles over public transport in the current crisis and high disposable incomes in the rural markets owing to a good harvest and the absence of adequate public transport options. Though the demand recovery in two-wheelers remains skewed towards the semi-urban and rural markets, inquiries and bookings reaching pre-Covid-19 levels provide some comfort over the sustainability of demand, according to an analysis by Motilal Oswal Institutional Equities.
Chennai-based TVS Motor has done remarkably well, registering sales of 1,89,647 units of domestic two-wheelers in July 2020 in comparison with 1,44,817 units in June 2020, lapping up a growth of 31%. Of this, motorcycles registered sales of 106,062 units and scooters registered sale of 78,603 units. TVS Motor’s management recently said premium products coupled with increased focus on international markets are the key strategies that would drive the company into further growth and profitability. The company has plans to consolidate the African and Latin American markets and utilise its Indonesian subsidiary PT TVS Motor Company Indonesia to step up exports to other countries, apart from exploring ways for venturing into other overseas geographies.
Hero MotoCorp recorded domestic sales of 5,06,946 units of motorcycles and scooters in July compared with the June volume of 4,50,744 units, registering a growth of 12.4% month-over-month. The company said it has reached more than 95% of wholesale dispatch numbers of the corresponding month in the previous year (July 2019). The robust volumes have been driven by strong retail sales due to the positive market demand. Hero MotoCorp made significant progress in ramping up the production across all of its eight manufacturing facilities — six in India and two in global locations. More than 95% of Hero MotoCorp customer touchpoints are currently operational, with strict safety measures and protocols in place, it said.
Bajaj Auto’s domestic two-wheeler sales in July were at 1,52,474 units against 1,46,695 units it achieved in June, registering a growth of 4%. The Pune-based company exported 86,082 units in July compared with 1,08,427 units in June. “The month of June 2020 witnessed a decent recovery and performance of Bajaj Auto was better than the industry,” the management said after releasing the Q1 results. Bikemaker Royal Enfield has sold 37,925 units domestically in July compared with 36,510 units in June, marking an increase of 3.9%. Exports for July wre at 2,409 units against 1,555 units in June. Royal Enfield said it is leading the leisure motorcycle segment in the UK, with its Interceptor 650 becoming the highest-selling motorcycle in the middleweight segment.
Suzuki Motorcycle India (SMIPL), the two-wheeler subsidiary of Suzuki Motor Corporation, Japan said it recorded close to 37% jump in July sales compared with the previous month in the same year. The company sold 31,421 units in domestic market and exported 2,991 units in July amid the Covid-19 outbreak. Koichiro Hirao, MD, SMIPL, said, “With the unlock phase, the automobile industry is now marching towards normalcy in terms of production, distribution and sales while continuing to adhere to all the precautionary measures. From August, we will try our best to achieve pre-Covid-19 production and sales volume.”
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