Wholesale despatches by two-wheeler manufacturers in December were a bit of a mixed bag with very subdued performances from the market leaders. The overall volumes were reasonably good, growing in high single digits, year-on-year, albeit on a low base; December 2019 had seen inventory de-stocking due to the phasing out of BS-IV. However, market leaders didn’t fare as well as the rest of the pack: Hero MotoCorp’s volumes rose by 5% y-o-y while Bajaj Auto reported a rise of only 4% y-o-y. Both players, however, fared well in the exports market; Bajaj Auto’s exports jumped 31% y-o-y, while Hero’s exports did even better, growing 74% y-o-y. Exports at TVS, too, were up a smart 39% y-o-y.
The management at Honda Motorcycle and Scooter said in a release that while the low base would help support growth in the next couple of quarters real positive growth and market expansion may take some time. Analysts at Jefferies observed registrations of two-wheelers had risen by 11% y-o-y in December, adding these had been partly boosted by the lagged effect of festive period sales. “The sustainability of this improvement in coming months would be key,” the analysts wrote. At TVS Motors, domestic wholesale despatches were up 13% y-o-y and they were at a strong 35% y-o-y at Eicher Motors.
An analysis by CARE Ratings shows most of the vehicles sold so far in 2020-21 have been those at the lower end, ranging between 75 cc to 110 cc and 110 cc to 125 cc; the two categories have accounted for roughly three-fourths of domestic wholesales. Given how the festive season had seen muted sales, domestic wholesales for two-wheelers are expected to decline 13-18% in FY21.
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