Two-wheeler sales dip for first time in 3 yrs

For the first time in over three years, sales of two-wheelers in India witnessed a decline last month, mirroring the slowdown that has gripped the country's economy.

A little less than 1.2 million motorcycles and scooters were sold last month, which was 5.5% less than the 1.3 two-wheelers sold in August 2011.

Almost all major two-wheeler companies including Hero MotoCorp, Bajaj, TVS, Yamaha and Mahindra registered a decline.

The only exceptions were Honda Motorcyles and Suzuki that bucked the trend largely due to the launch of their new 100cc mobikes two months ago.

Two-wheelers had defied all expectations and grown throughout even as other segments like passenger and commercial vehicles witnessed cyclical demand and slowdown.

"The decline in two-wheeler sales indicates that the problems in the economy are very real and fundamental," said Rakesh Batra, auto practice leader, Ernst & Young.

"This segment has grown at a constant pace over the years even as others have seen a cyclical demand mostly because of strong rural sales. However, I don't think growth this year will be more in other segments."

Like the car market, industry is now banking on a strong festival season for the growth story to be revived.

A flurry of launches is expected over the next one month and companies would look to lure customers into making purchases.

"Going forward, I am personally very hopeful and pretty sure that from the month of October, when the festive season begins, we will see a positive push in the retail sales," said Pawan Munjal, managing director and CEO, Hero MotoCorp. "For the months of July and August, the retail sales have been slow."