2-wheelers ride high on good harvest1 min read . Updated: 03 Jun 2008, 12:57 AM IST Despite expectations of oil price hike, domestic two-wheeler sales which had rebounded in April after a year-long recession, continue their growth story, reports Sumant Banerji.
Despite expectations of oil price hike, domestic two-wheeler sales which had rebounded in April after a year-long recession, continued their growth story in May on the back of high post harvest sales.
The country's top four two-wheeler companies — Hero Honda, Bajaj Auto, TVS Motor and Honda Motorcycle and Scooter India (HMSI) — registered single digit growth, breaking the monotony of declines registered in the last fiscal. While Hero Honda was in the forefront, growing by 9.5 per cent to 312,317 units in May 2008, Bajaj posted a seven per cent growth at 180,935 units, TVS Motors registered a four per cent growth at 112,770 units while HMSI grew by eight per cent to 86,083 units.
"Post-harvest sales have been good this year, especially in the wheat growing northern belt," said R. Chandramouli, vice-president (sales and marketing), TVS Motor. "Wheat prices have been 20-30 per cent more compared to last year and yield has been 10 per cent higher. This has resulted in higher cash in hand in the farm sector and that has led to higher sales."
A senior official at Bajaj Auto said there has been improvement in sales in the entry level segment which indicated that rural market purchases were up. "Commuter bikes had seen a major downturn, but it seems to be improving now as action in rural areas is hotting up," he said.
Automobile sales in fiscal 2007-08 had declined by 4.7 per cent largely due to poor showing by two-wheeler industry, which slid by 7.9 per cent. In this context, the good start in the first two months of this fiscal has raised expectations of the industry but an overall turnaround may still be some way off.
"Though there will be no decline, I expect this year to be a flat one as a drastic oil price hike can play spoilsport," Chandramouli said. "As of now, market has already adjusted to a ₹5 per litre hike."