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Two-Wheeler Makers Feel The Heat Of Demonetisation In January, 2017

Bajaj and Hero MotoCorp see a dip in the sales in January, 2017 as compared to the figures in January, 2016. Honda Two-Wheelers see a slight growth of 2 per cent while Royal Enfield saw a growth of 23 per cent.
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By car&bike Team

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1 mins read

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Published on February 3, 2017

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Highlights

  • Sales of Bajaj motorcycles dropped by over 3% in the third quarter
  • Hero saw a negative growth of 13.54%
  • Honda Two Wheelers saw a growth of a mere 2%
The Indian government's unprecedented demonetisation drive hit the auto industry and a major degrowth in sales was witnessed by two wheeler manufacturers including Hero MotoCorp and TVS, among others which have had disappointing sales in December 2016.

Bajaj Auto: Bajaj Auto too saw numbers plummet in the third quarter of 2016-17 financial year, while the company's profit also taking a beating during this period.

Bajaj sold 4,59,427 motorcycles during the third quarter of 2016-17 fiscal. A marginal drop of 3.28 per cent when compared to 4,75,027 units sold in FY2015-16. The numbers certainly weren't optimistic, especially since the manufacturer was expecting a strong surge based on the positive monsoons and the announcement of 7th pay commission earlier in 2016.

bajaj dominar 400 first rideBajaj launched the Dominar in this quarter

That being said, Bajaj Auto is still surging forward when it comes to cumulative sales for FY2017. The company has already clocked 15,87,852 motorcycles between April and December 2016, a 11 per cent growth over the same period last fiscal. Volumes are expected to grow further with recently launched products like the V12 and Dominar 400 contributing to the numbers.

With respect to sales, Bajaj sold 2,04,000 units of the CT100 and Platina in the third quarter of this fiscal, while the V brand sold 43,000 units during the same period. The company also sold 1,78,000 units of Pulsar and Avenger range, while 8000 units of the KTM motorcycles were moved out of showrooms in Q3 of this fiscal. The company managed to retail over 2 lakh units of the V since its launch in March last year.

Honda Motorcycle and Scooter India: There is nothing stopping Honda Two Wheelers from getting positive sales numbers, not even demonetisation! The Japanese company clocked sales of 3, 68,145 units in January, 2017. In comparison, Honda sold 3, 61,721 units in January, 2016 showing a 2 per cent growth. Although. We do not have the numbers for Honda's December, 2016 sales figures but we are told that the domestic sales in January, 2017 is a massive 79 per cent increase from sales in December, 2016. Also, Honda Two Wheelers gained 7 per cent in terms of market share. At the end of January, 2017, Honda Two Wheelers has an all-time high market share of 29 per cent.

Jan-17 2017 2016 Growth
Domestic Sales 368,145 361,721 2%
Export 21,341 16,968 26%
Total Sales 389,486 378,689 3%
2017 honda cb shine(2017 Honda CB Shine)

Y.S Guleria, Senior Vice President - Sales & Marketing, Honda Motorcycle & Scooter India Pvt. Ltd.said, "January 2017 saw customer sentiments improving at the onset of festive and marriage season. Growing even when industry declined, Honda has entered 2017 with all time high domestic market share of 29.2%. The impact of demonetisation was felt maximum on rural segment. The 2017 Union Budget presented by Hon'ble Finance Minister has firm thrust on rural and agro-economy through farm credit, rural infrastructure, poverty alleviation, road construction and direct taxation benefits. With almost 50% of two-wheeler demand coming from rural and semi-urban India, Budget 2016 should have a positive impact for the industry going forward."

With the recent launch of the 2017 Honda CB Shine and a new scooter lined for launch, HMSI has had a good start to 2017.

Hero MotoCorp: The company has reported a sales figure of 4, 87,088 units for the month of January, 2017. In comparison, Hero MotoCorp sold 5, 63,348 units in January, 2016. In absolute numbers, Hero sold 76,260 units lesser with a decrease of 13.54 per cent. The sales figure for December, 2016 was 3, 30,202 units. Hero believes that things are changing for the better and gradually things will get back to normal.

new hero glamour 5(New Hero Glamour)

As far as expansion is concerned, Hero recently launched its operations in Argentina. At the moment, Hero has presence in 35 countries across the world. Well, the impact of demonetisation is still being felt by Hero MotoCorp.

Royal Enfield: The Company is going from strength to strength as it posted yet another month of healthy growth in sales. Royal Enfield was able to keep itself shielded from demonetisation. It posted a sales figure of 58,133 units in January, 2017 which is a growth of 23 per cent over the sales of January, 2016. The exports too grew by a solid 171 per cent, although the figures are not so big in absolute numbers. Nonetheless, it does confirm Royal Enfield's growing interest in other markets in the world.

Jan-17 2017 2016 Growth
Domestic Sales 58,133 47,140 23%
Export 1,543 570 171%
Total Sales 59,676 47,710 25%

 

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Last Updated on February 3, 2017


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