India. First Quarter 2020 sales down 20% with the full year projected below the 15 million

Indian two-wheeler market started the 2020 keeping the negative trend in place and losing 14% in January and 19% in February, with March projected 29% down, at the 16th consecutive year on year lost. The effects of Covid19 will further deteriorate the outlook, already penalized by Euro 4 emission standard introduction and vehicles price increase.

 

Motorcycles Market Trend & Outlook

Motorcycle sales in India skyrocketed over the past few years, making the country the biggest motorcycle market in the World overtaking China since the 2016 and achieving a record volume of 22.4 million units (including commercial three-wheeler) in the 2018. 

During the 2012-2018 period over 124 million of new bikes have been sold in the country with annual increase of 8 million units, a too fast growth for a country with still poor urban and extra-urban infrastructures.

However, starting from the last quarter 2018 the market is is declining and all single month in the 2019 was reported year-on-year declining with final score for the entire year at 19.3 million units (including Rickshaw, electric scooters, local manufacturers and importers), down 14.4% from the previous year, losing 3.1 million sales.

Several factors causing the slowdown, including an increase in insurance premium in 2018 and the new BS-VI emission norms taking effect in April 2020. This led experts to suggest people were waiting for the discounts on BS-IV models and for more BS-VI-compliant models to land in the showrooms. However, the price of BS-VI model could be higher than the BS-IV.

So, while other observers forecast the sales to continue slipping for a few more months and to bounce back up once the new emission standards are introduced. we are more negative, considering the impact of expected new regulamentations necessary to shift the manufacturers focus toward the government 2025 target of 90% electric vehicles production and sales.

In addition, the economic effects of Covid19 will further hit the market. Actually the government was very reactive and people is following the instructions to stay home and shut down all operations for 3 weeks. We are projecting a limited decline effect in the hope that the virus will not invade the country, with unprecedented effects. However, adding this negative factors to the already negative  trend, the projections for the entire 2020 are almost negative.

Indeed, total sales after two months of the 2020 have been 2.8%, with January down 13.8% and February 19.8%. Early projection for March are to 1.07 million sales, down 29%.

Our current projection for the full year 2020 is to 14.9 million sales, down 22.5%.

 

Competitive Arena

India’s four biggest motorcycle manufacturers posted lower sales numbers in 2019 compared with the previous year

The market leader, Hero, ended sold 6.78 million units in the 2019, losing 1.1 million from the previous year record. The arch-rival, Honda sold 4.9 million two-wheeler, losing 16.7% or 1 million units, while the third, TVS reported 2.82 million sales, down 8.9% after having closed the first half in positive territory.

In fourth place Bajaj Auto with 2.55 million sales, down 7.8%. In our Database the KTM models produced in India by Bajaj are not included in these figures, but reported separately under KTM brand (which improved 27%).

In fifth place, Suzuki gained two position establishing the new record with 707.468 sales, up a remarkable 12.5%. Behind, Royal Enfield with 693.000 sales (-18.0%) followed by Yamaha with 659.000 (-16.9%) and Piaggio with 189.362 (-9.8%).

Looking at premium brands, the leader is KTM (locally produced and distributed by Bajaj) with 57.768 sales, up 27%.

BMW keeps booming, after the July 2018 local plant opening and ranks as 11th with 4.600 units. Probably India will be within the top 10 countries this year for the German brand!  Harley Davidson is struggling, losing 24.2% of sales.

Indian Motorcycles Market
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