Two-wheeler manufacturers pushed 9% higher dispatches to their dealerships during September (year-on-year) to over 2 million as they look forward to a demand boost following the cut in Goods and Services Tax (GST) rate to 18%.
GST cuts and Navratri spark demand revival
While the reporting month started on a sombre note with the onset of the inauspicious Shraad period, demand gathered momentum during the final week when the GST rates took effect and the start of the auspicious Navratri season, said market watchers.
Hero MotoCorp, the country’s largest two-wheeler maker, saw wholesale volumes grow by 5% to 647,582 units. However, its vehicle registrations grew by 19% during the same month to 323,230.
“The combination of the festive spirit and the new GST benefits has led to a sharp rise in bookings and enquiries. Showroom and dealership footfalls have more than doubled compared to the festive season last year, with significant traction observed in the high-volume commuter segment,” Hero said in a statement.
Royal Enfield leads growth; other OEMs post mixed results
Honda Motorcycle and Scooter India (HMSI), the country’s second-largest two-wheeler maker, saw the lowest growth among its peers.
The maker of Shine and Activa models posted 3% growth in September volumes to 505,000 units. It did not specify the reasons behind the tepid growth number.
Volumes of Chennai-based TVS Motor Company grew by 12% to 413,000, helped by strong demand for its scooter range.
Pune-based Bajaj Auto posted 5% growth in volumes to 273,000 units in September.
Eicher Motors-controlled Royal Enfield saw a 43% surge in volumes to 113,000 units in September.
B Govindarajan, managing director, Eicher Motors and chief executive officer, Royal Enfield, said, “It has been an incredible start to the festive season for us at Royal Enfield, we have registered our best ever monthly sales volume and have crossed 100,000+ retail volumes for the month.”
Though demand picked up during Navratri, some was held back on lack of discounts (negative impact in both urban and rural) and early festivals with extended monsoon (negative impact in rural), said a note from HBSC.
The report further added, “Normally, OEM increases discounts up to `5,000-10,000 per vehicle during Navratri, but it was relatively less this year and virtually absent on some key models. We think retails should improve materially during Diwali and any increase in discounts will only increase the retails.”