Registrations of motorcycles, scooters and mopeds – a proxy for retail sales – increased by 12.3% to 3,978,169 units last quarter and by 16.6% to 4,704,713 units in the previous three months ended December 31, 2022, show data compiled by the Federation of Automobile Dealers Association (FADA) from the Vahan portal of the ministry of road, transport & highways (MoRTH). These sales have risen for two consecutive quarters only twice since the outbreak of the pandemic, but the first one was more due to base effect as sales in the year-earlier period were low due to Covid-related disruptions.
Several senior industry executives ET spoke with said better agricultural output, higher minimum support prices for farm commodities and availability of water for irrigation because of healthy reservoir levels would help increase the disposable income, and further improve the consumer sentiment, in rural India, a major market for them. This, they expect, in turn, will help local sales of motorcycles and scooters grow in double-digits in the financial year that started April 1.
Retail sales of two-wheelers closed at about 16 million units last fiscal year.
Even as consumer inflation accelerated marginally in urban areas, it slowed month-on-month in rural markets to 6.72% in February 2023, as per data available with the Reserve Bank of India. Rural wage growth (year-on-year), meanwhile, is showing a “sharp rise”, BNP Paribas said in a note on Monday. Meanwhile, water levels in reservoirs, key in irrigating farmlands, stand well above the 10-year mean.
“The general consumer sentiment is improving,” said Niranjan Gupta, chief financial officer at market leader Hero MotoCorp, adding: “The constructive policies of the government and the social sector reforms have given a further boost to the demand scenario.” The two-wheeler industry expects these factors to push growth in the sector back towards pre-pandemic levels. Hero MotoCorp – which posted 8% sales growth at 5.3 million units last fiscal year – has lined up for launch nearly a dozen models.
Rival Honda Motorcycle & Scooter India (HMSI) plans to drive in about half a dozen models in the ongoing financial year, including two electric vehicles. On cards also are multiple models from Pune-based Bajaj Auto. These new models are expected to attract buyers.
Rakesh Sharma, executive director at Bajaj Auto, said: “After many quarters (barring those growing on the low base of Covid-hit months), we have started seeing signs of a turnaround. On the back of an improvement in the economic situation, consumer confidence is returning. There is more certainty of maintaining regular incomes (among customers), purchasing power is on a rise. This coupled with availability of retail finance is driving penetration.”
