India. In October the two wheelers market lost 15%. Hero is down 15% in the 2019

Indian two-wheeler market kept falling in double-digit during October 2019 with 1.8 million sales (-15%) with year to date figures down in double-digit. All top local brands are losing heavily. Pushed up by the recently opened local plant, BMW is gaining 900% ranking already in 11th place, only two years after landing in the country.

 

Economic Environment

Indian economic growth likely accelerated in Q2 FY 2019, which ran from July to September, after slowing in Q1, as indicated by a faster increase in private sector activity in Q2 than in Q1. However, the acceleration was probably modest, given consumer confidence dropped to a multi-year low in September. Moreover, although the Reserve Bank of India has slashed interest rates in recent months, bank lending growth slowed in September to the weakest pace since October 2017, which, coupled with the ongoing credit crunch among non-bank financial lenders, suggests consumers are not fully benefiting from lower interest rates.

The economy should slow in FY 2019, in part due to frugal lending to consumers and businesses, despite lower interest rates set by the Reserve Bank of India. Tense relations with Pakistan and a limp global economy are downside risks. More positively, however, expansionary fiscal policy should support growth.

 

Market Trend

Following rolling years with record after record, the calendar year 2019 is not positive for the Indian two-wheeler market and the growing pathway has been broken, first time after two years.

Indeed sales have been reported down since the start and the first quarter already ended with sales down 8.1%, with 4.8 million units and sale kept declining in the Q2 ending the First Half with 9.67 million units (-10%).

In the Q3 the trend worsened with both July and August sales close to 1.5 million and September 1.7 million (-21.6%).

In October sales keep decline in double-digit with only 1.8 million unit sold (-15.2%) and Year to Date October figures were 16.65 million units, down a huge 13.7%. 

Please note that within these data there are the two-wheelers, bot ICE and Electric, and three-wheelers (rickshaw).

The electric scooter segment for which the Government just raised a target to grow at 20 millions units in the next 5 years, dropped over 40%. To understand more read the dedicated report.

 

Competitive Arena

Looking at the single brand performance in the Year to Date 2019 data, on top of the list we found again the local maker, Hero, selling 5.7 million units during the first nine month of the year and losing a sharp 15.2%.

In second place Honda sold 4.2 million units, losing deep 19.0%, while in third place TVS reported 2.35 million sales, down 10.4% after having closed the first half in positive.

The best Indian performer in terms of annual variation ranks in fourth place and is Bajaj Auto with 2.19 million motorcycles sales, down 6.9%. Please note that KTM models produced by Bajaj and sold in India are not included in these figures, but reported separately under KTM brand (which is up 32%).

In fifth place Royal Enfield with 573.374 sales (-21.0%) ahead of Suzuki gained two position with 556.225 sales, up a remarkable +14.8%. Yamaha ranks in 6th place with 556.225 sales (-19.5%) and  Piaggio with 158.332 (-11.5%).

Looking at premium brands, the leader is KTM (locally produced and distributed by Bajaj) with 51.019 sales, up 32%.

BMW keeps booming, after the July 2018 local plant opening and ranks as 11th with 3.880 units. Probably India will be within the top 10 countries this year for the German brand!

Harley Davidson is struggling, losing 27.4% of sales.

Indian Motorcycles Market
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Market Pathway

The Indian Motorcycles Market is the largest in the World since the 2016 when it overtook the Chinese.

The market grew up uninterruptedly in the last 20 years. The milestone of 10 million annual sales had been achieved in the 2010 and only eight years later, in the 2018, a new milestone of 20 million annual sales has been broken.

Ending the year with total sales at 21.6 million, in the 2018 the market performed really well improving by 8.5% from the previous year and hitting the new all time record.

The Indian market was the second to hit the “over 20 million sales” milestone after the Chinese – now dropped below this wire – expanding the gap over all others markets and representing near the 30% of the global two-wheeler vehicles sales.

During the 2018, the market leader Hero sold 7.83 million units (+2.7%) and thanks to this results the brand was able to hit the record of over 8 million global sales (India + export sales). The recovery in rural demand translated into healthy growth in Hero’s strong hold entry sub-segment of motorcycles, which accounts for close to 60% of the total segment. The manufacturer continued to maintain its dominance in the domestic motorcycle segment while the relatively weak presence in the fast-expanding scooter segment penalized the total performance, underperforming the industry.

In second place there was Honda with a record of 5.88 million sales (+7.9%). As already seen in the 2017, Honda has achieved impressive market share gains in both the motorcycle and scooter segments, thereby expanding its share in the overall two-wheeler pie and inching closer to the market leader. Scooters remain be main strength for the brand, which improved the segment share supported by continued strong demand for its Activa model.

In third place the second Indian manufacturer, TVS, with 3.05 million sales (+13.2%), performing better than the market increasing its presence across all product segments.

In fourth place Bajaj Auto with 2.38 million sales (+17.4%), a great performance considering the weakness of this manufacturer in the fast growing scooter segment.

 

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