Hit hard by the regulatory actions such as demonetisation and changes in emission norms, the domestic three-wheeler sales in the first six months of current fiscal (April-September) saw a decline of 10%. However, the exports during the same period grew 19%, according to SIAM data. Most of the three wheeler manufacturers, including industry leaders such as Bajaj Auto, Piaggio Vehicles and TVS Motor have reported a decline. While Bajaj slipped by 8.22% in unit sales, Piaggio declined 11.69% and TVS fell by 12.20%, respectively. However, they have reported a growth of 20.15%, 4% and 18%, respectively on the export front in the first six months, according to SIAM data. The total domestic three-wheeler sales declined by 10% to 259,548 units between April and September as compared to 288,037 units sold in the same period last fiscal.
Industry exports registered a growth of 19% to 179,025 units during this period as compared to 149,917 units during the same six-month period last fiscal. According to analysts, the sharp fall on the domestic front was due to regulatory actions such as demonetisation, emission norm changes and pre-GST de-stocking. However, given the waning regulatory impact, the industry has witnessed gradual volume growth from August onwards. This was partly led by pre-festive inventory stocking and positive rural sentiment in key markets. An Icra analyst said that a shift towards LCV segment by a section of retail buyers also cast a shadow on the fall in domestic sales of three-wheeler industry. Another reason could be delay in issuing license as well fuel norms (changing to BS IV from BS III).
However, factors such as discontinuation of cap on permits for three wheelers by major states like Maharashtra and Gujarat, release of fresh permits by Delhi government and replacement demand from Karnataka following government’s decision to convert all vehicles to four stroke engine and ban diesel vehicles in Bengaluru saw the domestic three wheeler sales in September grow sharply to 61,860 units as compared to 51,950 units sold in September 2016.