Sales slowdown hits two wheeler makers with Bajaj Auto and Hero MotoCorp showing a slump in July 2012 sales
The slowdown in the Indian economy, which thus far hadn’t affected the two wheeler makers, seems to have hit the two leading two wheeler makers in India, Hero MotoCorp and Bajaj Auto, quite hard in July 2012. Both Hero MotoCorp and Bajaj Auto have reported a fall in sales numbers for July 2012, over the corresponding period a year ago. The sales of Bajaj and Hero MotoCorp have also shown a slump of 3% and 1% respectively, when compared to last month. Hero MotoCorp also has heavy inventory levels at dealer stockyards and this could further cause pressure on the two wheeler maker in the coming months.
While Bajaj auto has launched two new high volume products in the form of the Discover 125 ST and the Pulsar 200 NS, the two wheeler maker is facing a slump in sales mainly due to the export markets, particularly Sri Lanka. A while ago, the Sri Lankan government sharply increased duties on imported vehicles and this measure has hit Bajaj Auto hard, since the two wheeler maker exports big numbers of its motorcycles and three wheelers to the neighboring island nation. the increase in duties has translated into high prices of Bajaj products, leading to sales slumping drastically.
Hero MotoCorp, on the other hand has seen demand slip in the domestic market and this isn’t good news for the two wheeler industry considering that Hero is both the market leader as well as the bellwether of the industry, with its performance having a big bearing on the overall health of the sector. Two wheelers are usually bouyed by big demand during the Indian festive season of Dusshera-Diwali, with a large chunk of sales coming from rural India. However, sales could be muted this year as the monsoons have played truant over vast tracts of the country.
The monsoon scenario not improving could lead to rural disposable incomes falling sharply, which will also mean that two wheeler sales will be hit particularly hard. Bajaj though, remains bullish on sales growth with its hopes being pinned on the Pulsar 200 NS, which will be available nationwide by the end of August. For Hero MotoCorp, the PassionPro 110 motorcycle, its third new launch for 2012, will be expected to bring in the big volumes. On the whole, the slowdown it seems, has reached the two wheeler sector of India and the coming months would prove crucial as a lot rests on weather gods’ whims.