Buoyed by a strong pick up scooter segment coupled with an uptick in rural markets as well on the export front, the overall two-wheeler industry saw a strong and broad-based growth of 14.55% till January in the current fiscal. According to industry sources, the economy segment saw a growth at par with scooter growth, which was 21% till today. Based on the available data (SIAM), the domestic two-wheeler industry grew 13.6% in YTD. Scooter sales grew strongly by 21%, with the segmental share expanding by 200bp to 33.6%. Scooter is now the biggest segment in the 2W industry, overtaking the executive segment. The growth of 11.4% in motorcycle sales was broad-based, with the economy, executive and premium segments growing by 21.3%, 9.1% and 6%, respectively. Rural recovery is driving growth in the executive segment, which had witnessed degrowth for three years, said an analyst with Motilal Oswal. As per SIAM data, the two-wheeler industry’s overall sales for the period April-January 2018 was at 1,90,86,814 as compared to 1,66,62,467 units sold in the same 10-month period last fiscal, reporting a growth of 14.55% driven largely by scooters segment as well exports. SIAM added.
While the domestic sales during the period grew 13.62% to 1,67,62,095 units (1,47,56,059 units), the exports grew sharply at 19.32% to 23,09,818 units as against 19,35,786 units in the same period last fiscal. According to Motilal Oswal, scooter is the biggest segment in the 2W industry with a share of 33.6% (+200bp), as against 32% for the executive motorcycle segment (21.6% for executive 100cc). TVSL and Suzuki gained market share at the expense of HMCL and Yamaha. Rural recovery drove a revival in the economy and executive segments. The economy segment grew at its strongest pace (+21.3% in YTD FY18) in five years. Executive segment recovered with 9% growth, after witnessing degrowth for three years. Executive 100cc segment grew by 5.4% YoY and executive 125cc segment by 17.7% YoY in YTD FY18. Premium segment growth of 6% was entirely driven by Royal Enfield (+22%). Except RE, premium segment volumes were flat, the analyst pointed out. RE overtook Bajaj Auto to gain No 1 spot in premium segment for the third straight month.
Strong traction was witnessed in the 125cc scooter segment: Honda Grazia has been doing 20k units/month since its launch in November 2017, while Suzuki Access sales grew by 58% in YTD FY18. OEMs’ focus on the 125cc scooter segment was also visible in the just concluded Auto Expo 2018, which saw launch of five new 125cc scooter products. According to Motilal Oswal analyst, the reason for strong and broad-based growth of the industry has been due to a strong pick-up in rural demand in the current year which has boosted economy and executive segment sales. Moped was the sole segment to witness a decline in sales of 4.6% YoY, although segmental sales had recovered on a low base over the last few months, the Motilal Oswal analyst said further.