Saddled with unsold stocks and poor demand in the festive season, two-wheeler companies have rolled out a host of goodies.
The offers include direct cash discounts, exchange benefits, low down payments, lower interest rates on loans with 100 percent on-road funding and discounted services schemes.
India’s largest two-wheeler maker Hero MotoCorp, for instance, is offering Rs 7,500 instant discount to buyers opting for card payments as well as an exchange or loyalty bonus of up to Rs 5,000.
ICICI Bank is offering monthly instalments of Rs 26 per Rs 1,000 loan, coupled with low processing fee and 100 percent funding of on-road price on Honda H’ness and CB350RS.
Dealers of Bajaj Auto, the maker of Pulsar and KTM motorcycles, have lined up Rs 2,000 discount on the economy model Platina. Dealers are enticing customers with offers of three-minute vehicle loans and 1-percent processing fee.
“Retail sales are down 40 percent and we have stocks of 45 days. Buyers have become very cautious in the way they want to spend, especially the lower middle-class and middle-class customers. We have offers on vehicle exchange and vehicles bought on loan but that is not helping sales much,” said a South India-based dealer of Bajaj Auto.
Chennai-based TVS Motor Company is offering savings of up to Rs 10,000 on the Apache RTR 2004V, including a cashback offer of Rs 3,500 and savings offer of up to Rs 13,000 on the Ntorq 125.
The desperation level is such that even newly launched models are carrying offers. Yamaha, for instance, is offering scooters Fascino 125FI hybrid and the Ray ZR125Fi hybrid at a cashback offer of Rs 4,000.
Hero MotoCorp, TVS Motor Company and Honda declined to comment on the story.
Demand remained subdued even during the Navratri, Eid and Dussera. According to initial vehicle registration numbers shared by the Vahan data of the central government and collated by the Federation of Automobile Dealer Association, two-wheeler retail sales during the Navratri and Dussera was 17 percent lower than same period last year.
More accurate data will surface in the coming days since the Vahan data has a two-week lag. But, a retail level demand check with dealers revealed that off-take has remained below expectation so far. With Diwali coming closer, there is, however, fresh hopes of revival in sales.
A channel check done by Emkay Global Financial revealed: “Dealers are expecting double-digit growth in the urban areas, supported by a pickup in business activity and the re-opening of educational institutions. In comparison, demand is expected to be subdued in rural areas as customer sentiments are yet to normalise after the COVID second wave. Dealers have built inventory levels of up to two months in anticipation of a healthy festive season.”
Inventory levels with dealers which have traditionally been low during the festive days at about 20-25 days remained high around 35-40 days. September retail two-wheeler volumes were down 12 percent, according to FADA.