A continuous fall in domestic demand has seen India ceding the rank of being the biggest two-wheeler market in the world to China, at least in monthly sales.
China clocked domestic two-wheeler sales of 1,659,000 units in September as against sales of 1,656,774 units in India. This is the first time since December last year that China has trounced India in monthly sales.
India’s two-wheeler sales have been in the negative since December last year due to a variety of factors as the country experiences one of its worst downturns ever, with each of the automotive segments (cars, three-wheeler, trucks) witnessing a slowdown.
But here is the silver lining. In terms of annual sales, India still leads China, something it has been doing since 2016. In the January-September period, India clocked 28.7 million two-wheelers sales, whereas China sold 24.72 million units during the same period.
India had beaten China for the first time on an annual basis in 2016.
Since July though, China has witnessed a turnaround, with sales jumping as much as 30 percent in September. During September, two-wheeler sales in India slumped 22 percent, as per data shared by the Society of Indian Automobile Manufacturers (SIAM).
The Centre and state-mandated regulatory changes (including ABS and CBS braking systems requirements), hike in insurance premiums, slowdown in rural demand, rising fuel prices and floods in many states were some of the reasons behind the recent slump in two-wheeler demand.
Hero MotoCorp and Honda Motorcycle and Scooter India (HMSI), the two leading two-wheeler manufacturers controlling 63 percent of the domestic two-wheeler market, had to undertake unscheduled factory shutdowns to avoid further piling up of inventory with dealers.
Bajaj Auto and TVS Motor Company had to also cut back on production during the past few months as retail off-take remained subdued longer than anticipated. Pre-festive buying remained weak this year despite all companies rolling out consumer benefit offers.
Hero's sales during April-September fell 17 percent to 3.44 million units while that of Honda declined sharper by 19 percent, SIAM data sows. At least one brand UM Motorcycles has exited the country while Mahindra Two Wheelers has stopped development of any more products under its namesake brand.
With Indian two-wheeler companies getting ready to roll out next generation Bharat Stage VI (BS-VI) grade motorcycles and scooters in a few months, prices are expected to head north, dampening demand further.
Prices of BS-VI two-wheelers are expected to rise by 10-15 percent compared to the present generation BS-IV grade. Hero, Honda and TVS have already rolled out one model each with BS-VI engines. After April 1, 2020 only sale of BS-VI vehicles will be allowed.