After nearly 10 months of research, 29-year-old Rahil Sethia bought a new Bajaj Pulsar three days after the steepest ever petrol price hike of ₹7.5 per litre last month. The twist: his research had been for a car.
Sethia, who works for a telecom tower maintenance company that entails much field work, had been saving for a year-and-a-half to buy his first car. Deflated by the high running cost, he ended up buying the motorcycle.
"It is always a dream to own a car and I had been saving for that," Sethia said. "But what is the use if it results in drastic rise in expenses. I don't have the money to buy a diesel car ... my daily commuting is such that a motorcycle became necessary."
It is perhaps thanks to customers like Sethia that the domestic two-wheeler industry is not feeling the pinch of the fuel price hike. In fact it may be a blessing in disguise, as the running cost of a motorcycle at R1 per litre is a quarter of a small car's ₹4 per litre.
"With the lack of adequate public transport infrastructure, a two-wheeler caters to basic commuting needs," said YS Guleria, vice-president sales and marketing, Honda motorcycle and scooter india. "Even the cost of running of a two wheeler is much lower than that of a car."
In 2011-12, domestic two-wheeler sales grew by 14.16% while the sales of entry-level cars declined by almost 6%. In the current fiscal, the trend has become more clear.
Car market leader Maruti Suzuki saw the sales of its entry-level small cars — Alto, M800, Wagon R, Estilo and A-Star — fall 29% last month. Hyundai's Santro and i10 sales stagnated.
* Two-wheeler major Hero MotoCorp on the other hand saw its best ever month in May with sales of over 5.5 lakh units, a growth of 11.3%. Erstwhile partner Honda grew by over 52%. "Whenever petrol prices go up, it makes our motorcycles even more attractive with lower fuel-efficiency," said Anil Dua, senior vice president (marketing and sales), Hero MotoCorp. "While such shifts in customer preference do not happen overnight, this does determine the trend over long-term."