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Demand for new motorcycles and scooters slowed down significantly in December as three of the top five companies posted flat to negative growth in sales.
The four brands that announced their December sales numbers – Hero MotoCorp, TVS Motor Company, Bajaj Auto, Royal Enfield – clocked only two percent growth at 8.77 lakh as against 8.59 lakh sold in the same month a year earlier. These companies control nearly 70 percent of the domestic two-wheeler market.
Hike in insurance costs, tightened lending rates, regulatory changes in one state, poor demand from urban pockets and week-long annual maintenance shutdown at the manufacturing plants led to poor demand from dealers during December.
Hero MotoCorp, the biggest manufacturer of two-wheelers, reported four percent decline in sales to 4.53 lakh units in December as against 4.72 lakh units sold in the same month last year.
"The increased cost of two-wheeler insurance ahead of the Diwali festive season and the prevailing liquidity crunch in the market impacted the overall momentum of growth in the industry during the entire third quarter," said Pawan Munjal, chairman, Hero Motocorp, in a company release.
The drop for Hero has come despite the company launching an all-new 125cc scooter Destini in November which was aimed at reviving Hero’s fortunes in the scooter segment where it had been struggling since several months.
TVS Motor Company, the maker of models such as Apache and Jupiter, clocked just one percent growth in sales in December. Scooters sales slowed down despite the company claiming to have received good response for its first 125cc scooter NTorq.
In all the Chennai-based company sold 2.09 lakh units to its dealers in the domestic market during December as against 2.07 lakh sold in the same month last year.
Pune-based Bajaj Auto beat the industry yet again by a huge margin clocking a growth of 39 percent in domestic two-wheeler sales. The company clocked 1.57 lakh during December as compared to 1.12 lakh units sold in same month last year.
The company has consistently managed to beat growth of the industry since the start of the year when it cut prices of the CT 100, its most affordable motorcycle and on the entry variant of the Pulsar model. The company, however, stated a few months ago that it had restored the prices of the CT 100 model to its earlier level.
Leisure bike maker Royal Enfield clocked the worst performance of the lot, reporting a fall of 14 percent in December. The Eicher Motors-controlled brand sold 56,026 units in December 2018 as against 65,367 units sold in December 2017.
Sales of Royal Enfield bike has increasingly come under the pressure since the start of the year. The brand has underperformed compared to the industry. Following a surge in demand for Jawa models demand of Royal Enfield bikes is understood to have softened. Both Jawa and Royal Enfield compete in the same segment and are in a similar price band.
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