Untimely and scanty rains crippled rural incomes last financial year, putting pressure on two-wheeler companies, as they ended the year marking a fall in motorcycle sales for the first time since 2007-08.
Despite several launches in the bread and butter economy segment (100cc-110cc), which are targeted at rural buyers, favourable fuel price and affordable loan rates, motorcycle sales continued to remain muted.
Failed monsoon in many states such as Maharashtra, which as of now is reeling under severe drought, has a crucial impact on rural spending patterns. In addition, the shifting of focus to scooters, where the gearless two-wheeler has gained preference over entry bikes, has also had its impact on motorcycle demand.
Last year, two-wheeler market leader Hero MotoCorp failed to beat its 2014-15 sales as rural demand, which generates about 40% of the companies’ volumes, remained disappointing. The company’s Splendor motorcycle brand was pulled down to the second spot as Honda’s Activa, the country’s biggest two-wheeler brand and the largest selling scooter, replaced it.
One of the biggest gainers last year was Pune-based Bajaj Auto, which is India’s third-largest two-wheeler manufacturer. The company was among a handful of two-wheeler makers to post a rise in market share, which was achieved through the success of newly launched models under the Avenger, CT100 and Pulsar brands.
The Pune-based company is doubling capacity to meet demand, especially for models like the newly-introduced V15 and Avenger. To add the V15, which is a 150cc bike priced close to a 125cc motorcycle, presently has a waiting of 15-30 days.
Eric Vas, president (motorcycle business), Bajaj Auto, said, "We are confident of achieving market share of more than 22% by end of this year. The V15 has been very well received so much so that we are falling short on supplies. We are ramping up capacity of the bike to 20,000 units from 17,000 units. Presently, (there is) a waiting of 15-30 days on the V15. The Avenger, meanwhile, is doing about 25,000 units a month".
Hero’s arch-rival Honda was the biggest loser of market share last year in the motorcycle segment. The company has been expanding its reach into the rural markets.
However, its supplies have not been able to keep pace. Honda Motorcycle and Scooter India, the second largest two-wheeler maker, has been running its plant to full capacity primarily to meet demand for Activa.
Honda’s Dream series bikes and the CB Twister, which are in the up to 110cc category, could not create the impact expected from them. However, the new brand Livo has generated some excitement, according to industry sources.
After two consecutive years of drought-like condition, companies are hoping for a good monsoon to lift spirits this year even as forecast given by Skymet the privately-owned weather forecasting agency has predicted above normal monsoon this year.
“The industry witnessed mixed fortunes in FY16 with sales looking up in the second half of the year. Timely measures by the government and a good monsoon will be essential in sustaining this positive trend. The journey from here promises to be even more exciting as we gear-up to launch our in-house developed products”, Pawan Munjal, chairman and managing director, Hero MotoCorp said in a recent release.