Auto Industry Slowdown: Hero MotoCorp Sales Decline 21 Per Cent

The slowdown in the domestic auto industry has now moved to the second quarter of the current financial year with the world's largest two-wheeler manufacturer, Hero MotoCorp reporting sales of 5,35,810 units in July 2019, slipping 21 per cent from the same month a year ago, when the Indian two-wheeler manufacturer had reported overall sales volumes of 6,79,862 two-wheelers. The two-wheeler giant's overall sales have been declining since the beginning of the current financial year, but during the last couple of months, Hero has been able to despatch more than 6 lakh two-wheelers during the last two months.

Also Read: Hero MotoCorp June 2019 Sales Drop 12 Per Cent

Hero will bank on its latest products, including the XPulse to shore up sales volumes in the next few months

Hero has launched several new products in the last couple of months, with three new motorcycle launches in the 200 cc platform in May 2019 - the Hero XPulse 200, Hero XPulse 200T and Hero Xtreme 200S. Hero also launched two new scooters, the Hero Pleasure+ 110 and the Hero Maestro Edge 125. Hero MotoCorp also rolled out India's first two-wheeler meeting the upcoming Bharat Stage VI emission regulations, with the new Hero Splendor iSmart. While the slowdown in the auto industry intensifies, the next few months will be crucial for Hero MotoCorp, as well as other auto manufacturers, as the festive season kicks in, which has traditionally seen high sales volumes.

Also Read: Hero Beats Street Estimates With Rs. 1,247 Crore Q1 Profit

The upcoming festive season and BS6 off-take will depend on sales volumes in the industry

While the overall sentiment in the auto industry has been dull during the past few months, the outlook for the rest of the year will depend on multiple factors, including the progress of the monsoon, festive season offtake, as well as improvement in the liquidity situation. A change over to new technology with the Bharat Stage VI (BS6) emission regulations kicking in from April 1, 2020 will also mean slightly higher prices of two-wheelers. While prices are expected to go up, most manufacturers are hoping there will be some pre-buying during the last quarter of the current financial year (January -March, 2020) to offset the BS6 pricing.