Entry-level sales ride on two wheels this festive season

New Delhi | Mumbai: Sales of motorcycles and scooters rose in double digits during the NavratriDussehra period, with a strong pickup in demand for entry-level models indicating an improvement in sentiment in a crucial market for two-wheelers—rural India.

Executives at two-wheeler companies and dealers predict the momentum to continue in the coming weeks, making this festive season ending with Bhai Dooj on November 3 to be among the best for the industry. They also project sales for the fiscal year to be close to the pre-pandemic record of 21 million units hit in fiscal 2019, boosted by an expected pickup in rural economy on the back of favourable monsoons and good farm output, as well as an increase in minimum support prices for several key crops. Also, the recent government decision raising the dearness allowance is expected to put more money in the hands of 10 million central government employees and pensioners, and a part of this is likely to be spent on buying discretionary items like two-wheelers.

Sales of two-wheelers rose 15.4% in the 10-day period of Dussehra ending October 12 compared with the festival days of October 15-24 last year, shows vehicle registration data from the government’s Vahan portal, collated by Goldman Sachs. Other segments of the vehicle industry too posted growth, with sales of cars increasing by 6.6%, three-wheelers 12.3%, light goods vehicles 9.1% and heavy goods vehicles 5.8%.

“Sales growth in the two-wheeler segment the last few months was led largely by demand for scooters in urban centres,” said Shailesh Chandra, president of the Society of Indian Automobile Manufacturers.

“But there is now a significant improvement in demand in rural areas,” said Siam’s Chandra. “Good monsoons, healthy crop yield and government spending on rural development programmes should all help build this momentum further, spurring growth in both the two-wheeler and four-wheeler segments in these markets.”

The government this week increased the MSP for seven rabi crops by as much as 5%. It also raised the DA and dearness relief by 3%. These and other programmes like the Pradhan Mantri Gram Sadak Yojana, industry experts said, will help boost consumption in rural India that accounts for more than half of two-wheeler and about a third of car sales.A Hero MotoCorp dealer in North India said there was strong demand across products and that models like Xtreme 125R motorcycle and Destini Prime scooter performed particularly well. During the period spanning Navratri and Dussehra, retail sales at the dealership increased 10% compared with the same period last year, he said.He expects the entry-level (up to 125 cc) motorcycle segment to gain further momentum in the second half of the festive season that concludes on November 3.

With the exception of Bajaj Auto, all leading two-wheeler makers — Hero MotoCorp, Honda Motorcycle & Scooter India, TVS Motor Company, Royal Enfield, Suzuki and Yamaha — posted an uptick in sales this Navratri. Healthy demand momentum in rural markets helped Hero MotoCorp and TVS Motor gain 0.92 and 1.02 percentage points, respectively, in market share during this 10-day period.

For Bajaj Auto, Dussehra sales were “muted and lower than expectations”, executive director Rakesh Sharma said after the company reported its secondquarter results.