Fuel price hike good for small capacity bikes


The government’s move to free energy prices, which may raise fuel rates in the country, is expected to push the demand for small-capacity, fuel-efficient bikes. Reason: The sequential rise in inflation will lead to a change in the buying pattern among bike consumers.

A 100-110cc bike gives an average mileage of 75-80 km a litre under a mix of city and highway riding conditions, compared to just 40-50 km a litre or less by a 150cc and above bike. Although the fuel-efficient range is targeted more towards the interior of the country than urban centres, companies like Honda Motorcycle and Scooter India (HMSI), India’s fourth-biggest seller of two-wheelers, feel that a constant increase in fuel prices will change the buying pattern even in the cities.


Naresh Rattan, vice-president (marketing and sales), HMSI, said: “The overall mindset of the Indian two-wheeler buyer is transfixed towards the fuel-efficiency of the bike. Any increase in fuel prices has a psychological effect on the buyer.”

City-based two-wheeler dealers of Bajaj Auto and Hero Honda said there had been an increase in the number of enquiries for economy bikes soon after reports stated the government may hike fuel rates.

“The demand for our Discover 100 gathered pace over the last few days. People who were earlier keen on going for the Discover 135 are settling for the 100,” said a Pune-based Bajaj dealer.

According to estimates provided by HMSI, the average monthly run by a motorcycle owner is around 1,500 km. The average monthly fuel expenditure is around Rs 750. An increase of up to Rs 3 per litre in petrol price will mean an increase of up to Rs 50-60.

More than 4.5 million two-wheelers in the economy segment were sold last year, which is roughly half of the total of 9.37 million units sold during the last financial year in India.

However, Milind Bade, general manager (marketing and sales), two-wheelers, Bajaj Auto, said: “People are very sensitive towards fuel price hikes and we are expecting their decision to be influenced. However, we also believe that this change in preference will be momentary.”