Honda estimates two-wheeler sales to witness double digit drop
Honda Motorcycle and Scooter India (HMSI) expects two-wheeler sales to remain in the slow lane this fiscal, with the coronavirus lockdown having already taken its toll on dispatches in the first quarter, a senior company official said.
The company, however, remains optimistic on the long-term growth prospects of the domestic two-wheeler industry.
It has gathered from a survey that more people are now wiling to buy a two-wheeler in order to stay safe and maintain social distancing amid the Covid-19 pandemic.
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"Literally, the first quarter has gone so there is no way you can cover in nine months for the entire year. In fact, the industry itself was already in slowdown mode and Covid-19 has only added to the worse situation," HMSI Director Sales and Marketing Yadvinder Singh Guleria told PTI.
He added that although sales have resumed in May, it is just the beginning from zero to some business.
"To say that this year sales are going to be positive, that is not possible...recovery is not possible this year, it will still be a double digit de-growth in 2020-21," Guleria noted.
He expressed hope that the situation may improve in the next few months due to normal monsoon and structural reforms in the farm sector but even then the benefits would accrue only in the next crop cycle.
"Agrarian economy may come back, we are seeing some traction in tractor sales as well, but negative (trend) will still stay in 2020-21 and maybe we can see some growth in next fiscal because the base itself will be much lower," Guleria said.
On insights from sales in May, where HMSI retailed over 1.15 lakh units, he said more than one-third of buyers shifted from public transport in order to follow social distancing norms.
"There is not much change in the buying behaviour. Around 55 per cent preferred cash while 45 per cent financed the two-wheeler," Guleria said.
Also, buyers prefer low down payment kind of schemes as they want to preserve cash, he added.
"Product enquiry is increasing, after sales load is increasing, new customers have started coming into the workshops, in the long term we need to see how it will pan out," Guleria noted.
He also emphasised that customers will not compromise on safety and hygiene when visiting a sales or service outlet.
Asked if the company would still go ahead with its new launches considering the market situation, Guleria said: "No product launch has been put off the shelf, launches will happen as planned earlier for this financial year."
He said that 250 supply chain partners of the company, having 308 plants, received green signal in May-end to resume operations.
Production at the company's plants, however, will be ramped up as per the market demand, he added.