Colombia June. Bajaj Auto leader with low tone in a market up in double-digit

Colombian Motorcycles industry ended the first half 2019 as the second in South America with 291.422 sales (+13.4%) despite economic data are relatively weak. Yamaha and Honda are reducing the gap from the market leader, the Indian Baja Auto. The fastest growing brand so far has been Victory.

 

Economic Environment

Available data suggests that the relatively weak dynamics of Q1 persisted in the second quarter. Retail sales growth eased in April, which, coupled with consumers turning more pessimistic, on average, in April–May compared to the first quarter, signals that private consumption lost some strength. Furthermore, industrial production contracted for the first time in over a year in April. This, alongside the manufacturing PMI entering contractionary territory in June, following fairly positive readings in April and May, hints at softer business activity in Q2.

The economy is expected to gather some momentum this year, primarily on the back of upbeat capital spending on infrastructure and oil-sector projects, and solid private consumption. That said, fiscal tightening and slower export growth are seen weighing on overall activity. Uncertainties surrounding fiscal reform and a challenging external environment cloud the outlook.

 

Market Trend

Following the positive previous year, the start of 2019 was again with wind on the back for the Colombian Motorcycles Industry. After ending the first quarter with a robust +16.5% with 148.394 sales, sales kept in positive territory during the Q2 with April sales at 48.028 (+27.9%), May at 51.414 (+15.9%) and June at 43.586 (+4.0%). 

The first half sales have been 291.422 (+13.4%), the second highest in South America, after Brazil.

The market leader year to date is again the Indian Bajaj Auto which in the first half has sold 65.406 units, up 4.6%, with 23.0% of market share. Baja also holds the best-selling model, with the Boxer 100 CT.

In second place there was the Japanese Yamaha with 53.201 sales (+14.1%) followed by the archrival Honda with 48.713 (+11.7%), AKT with 41.072 (+9.8%), Suzuki with 22.986 (+13.1%), the Taiwanese Kymco with 11.902 (+16.9%) and Victory with 11.605 (+19.9%).

 

Colombian motorcycles industry heritage

In the last decade the Colombian motorcycle industry was completely transformed becoming not just a lifestyle sector, as in the past, but a key factor in the private mobility, thanks to the expansion of product offer, the fall of prices, the increased care for safety and the youngest generation love.

So today there is a wider range of consumers approaching the purchase of a motorcycle to transport themselves to the university, to their workplaces or working for the new fast developing category of delivery-men, people who use motorcycles to fast deliver everything, from food to goods.

Today in Colombia over 50% of vehicles park is on two-wheeler and in average there is a motorcycles each 5 people living in the country. These data allow to explain why motorcycles are actually an important tool for Colombians, for transportation, for lifestyle and for working as well.

To achieve these outstanding performance a brilliant job has been done by the government, which has progressively changed rules to guide the sector evolution, and by the manufacturers, which have made a tremendous effort to create local facilities and produce high quality-good priced vehicles and related products such as accessories, equipment and special clothing.

In Colombia there are six motorcycle manufacturers (the oldest is active since 1942) which operate assembling in partnership with top international firms, like Honda, Kawasaki, KTM, Kymco, Victory, Yamaha, Suzuki, Hero producing both for domestic market and export.

The Colombian motorcycles market is the fourth largest in Latin America after Brazil, Mexico and Argentina.

The market grew up consistently in the decade ended in 2014, when total sales hit the highest level 694.800 units. However, since 2015 the industry entered in a negative mood losing near 200k in the following three-years ending the 2017 below the half million (with 496.696 units).

Finally, in the 2018 the trend changed and since the Q1 the demand sustained the market which closed the year at 543.265 units (+9.4%).

The country has been chosen as production hub for the Latin America by several Asian manufacturers and is not a surprise to find as market leader the Indian Bajaj Auto which sold 130.452 units in the 2018, up 1.6%, with 23.8% of market share.

 

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