Thursday, 10 Oct, 2024
By: Yash Gupte
Peak sales for the sector were recorded in 2018–19 at 21.18 million units. Image Source: IANS
In the fiscal year that ended in March 2023, around 15.86 million units of two-wheelers were sold, a 18 percent increase over the 13.57 million units it sold the previous fiscal year.
After three years of decline, the domestic two-wheeler market experienced double-digit annual growth in 2022–2023 (year-on-year growth). In the fiscal year that ended in March 2023, around 15.86 million units of two-wheelers were sold, a 18 percent increase over the 13.57 million units it sold the previous fiscal year. The market, which saw sales below the 16 million unit mark in 2014–15, is still at a 9-year low. Peak sales for the sector were recorded in 2018–19 at 21.18 million units. Analysts believe that the retails are still struggling and that the market for lower CC models has not yet recovered. Over the last three years, entry-level categories have seen price increases of roughly 50 percent, which have had a negative effect on industry mood.
With 1,59,95,968 units and a resounding 72 percent of all retail sales in FY2023, two-wheelers will undoubtedly carry the burden in terms of sheer numbers, but this is one market that is still underperforming. Despite their 18 percent YoY rise and 15.9 million units, two-wheeler retail sales are currently at a seven-year low, which is unmistakably a result of the ongoing decline in sales coming from rural India. The impact is visible from the retail sales of market leader Hero MotoCorp. The company's market share decreases by almost 2 percentage basis points to 32 percent from 34.35 percent a year earlier, despite the 51,30,611 units being a 11 percent gain over FY2022 sales.
With 38,92,340 units, Honda Motorcycle & Scooter India, the company's main competition, had a significantly stronger 31 percent growth rate and boosted its market share from 22 percent to 24.33 percent in FY2022. With a 24.46 percent increase to 2.4 million units, TVS Motor Co. now holds a 15.53 percent market share for two-wheelers.
Bajaj Auto has seen the same pressure from declining commuter bike sales as Hero MotoCorp. YoY growth was a meagre 2.95 percent for 1.69 million units, which was reflected in the company's share falling to 10.62 percent from 12.23 percent in the prior year.
Royal Enfield recorded its highest ever overall sales in the fiscal year that ended on March 31, 2023. The renowned motorcycle producer, known as the inventor of India's mid-sized two-wheeler market, reported that it had sold 8,34,895 units in the fiscal year 2022–203. Essentially, this equals a 39 percent increase over the prior fiscal year. Royal Enfield has already surpassed its prior record, which was set in FY 2018–19. It's also impressive that the company's export volume in FY 2022–23 exceeded one million units for the first time ever.
Source: Society of Indian Automobile Manufacturers
Going with the latest figures, in May 2023, Hero MotoCorp continues to dominate the market with a 26.7 percent increase over its April 2023 sales, which stood at 3,86,184 units.
Hero MotoCorp recorded a gain of 8.2 percent even when compared to its May 2022 number (4,52,246 units). In the previous month, the company was able to ship 11,165 units. Hero recently updated the HF Deluxe and the Xpulse 200 4V, and it is now working on a number of additional models. TVS, situated in Hosur, reported an increase of 8.4 percent in sales in May compared to April 2023 (2,32,956 units). TVS increased sales by 31.9 percent compared to May of previous year, when it reported 1,91,482 units sold. Compared to April 2023 (1,81,828 units), Bajaj increased their May sales figures by 7.1 percent.
Source: Society of Indian Automobile Manufacturers
In FY 23, the demand profile for motorcycles and scooters again shifted in favour of the high-end. Urbanisation and premiumization were the factors that initially caused this tendency to emerge in FY13–18, but it was reversed over FY19–22 as the rural economy fared better than the urban one and the replacement cycle was postponed by Covid. According to the research from Jefferies, the trend once more shifted in favour of scooters and expensive motorcycles in FY23.
Domestic sales of entry-level scooters (75cc-125cc) decreased from 6.66 million units in 2018–19 to roughly 4.8 million units in 2022–23. Sales of entry-level motorcycles (75cc-110cc) decreased as well, from 8.42 million units in 2018-19 to 5.23 million units in 2019.
According to analysts, the sector need two to three years of strong per capita income growth and reasonably low to moderate inflation. Recovery of the entry level commuter segment becomes difficult for 2023–2024. However, they appear certain that the sector won't show any decline in growth moving forward.
Source: Society of Indian Automobile Manufacturers
Exports of two-wheelers reached an all-time high of 4.43 million units in 2021–22. However, shipments fell 18 percent to 3.65 million units in 2022–2023. Exports for market leader Bajaj Auto fell over 25 percent to 1.6 million units in 2022–23 from 2.19 million the year prior. Africa and Latin America combined account for almost 60 percent of India's two-wheeler exports' total market share. Other nations include, among instance, Bangladesh and Sri Lanka. Due to problems with their own economy, the South Asian nations moved more slowly than usual.
Coming over to electric two-wheelers, as per the data released by the Society of Manufacture of Electric Vehicles (SMEV), the electric two-wheeler sales increased over two and half fold to 8,46,976 units in 2022-23.
