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  1. Gunning the gas: With two-digit sales growth, two-wheelers pick up pace

Gunning the gas: With two-digit sales growth, two-wheelers pick up pace

Analysts say April-December sales augur a rate of growth of 12%, a level that was last seen in FY12.

By: | New Delhi | Published: January 12, 2018 5:36 AM
two-digit sales growth, two-wheelers , automobile sector, economy, india During December motorcycle sales rose a whopping 40.31 percent to 7,88,156 units. (Reuters)

Motorcycle sales, which had been in the slow lane for the past five fiscals, have picked up speed this year. According to data released by the Society of Indian Automobile Manufacturers (SIAM) on Thursday, sales during April-December of the current fiscal grew 10%. Though SIAM had refrained from giving any exact projection for motorcycle sales in the current fiscal by merely stating that it expected moderate growth, analysts are optimistic now that the fiscal may see sales back in double digits, nearing 12%, which the industry clocked way back in FY12. In FY17, motorcycle sales grew by just 4%.

In fact, during December motorcycle sales rose a whopping 40.31% to 7,88,156 units. This maybe because of the low base during the month in the previous year as sales were badly hit due to demonetisation. However, analysts said that the growth in December this year would have been even higher had it not been the last month of the calendar which prevents companies from despatching higher volumes to the dealers.

Market leader Hero MotoCorp posted domestic sales of 3,98,816 units during the month, up 42.71% against the same month last year. Rival Bajaj Auto’s bike sales rose 5.87% to 1,12,930 units, while Honda Motorcycle and Scooter India (HMSI) saw its sales rise by 133% to 1,24,425 units.

Binaifer Jehani, director, Crisil Research, said that motorcycle sales have grown at a faster pace this year on account of improved rural demand due to a good monsoon. “Also, the Seventh Pay Commission payouts have started to show an impact on sales numbers,” she said.

“Good kharif output and farm loan waivers in key motorcycle contributing states like Uttar Pradesh, Madhya Pradesh have led to a growth in the overall industry. Normal rabi sowing is further expected to improve sentiments and boost contribution from the rural side.

MSPs (minimum support prices) for rabi crop have been increased by 6-11%, further adding to rural incomes,” she added.

Jehani said that sales from here on may continue to be strong if there are no regulatory changes.

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