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Two-Wheeler Sales Pick Up In July 2020, But OEMs Remain Cautious

Two-wheeler sales across brands have started to pick up steam, with the year-on-year decline in July much lower than in June.

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Pent up demand kicks off two-wheeler sales pick up in July 2020

Highlights

  • Hero's July 2020 sales cross 5 lakh units, less than 1 per cent decline
  • Honda two-wheelers despatch over 3.21 lakh two-wheelers in July
  • TVS Motor Company's July 2020 sales stood at over 2.5 lakh units

Two-wheeler despatches by India's top brands have started showing recovery in July 2020, after several months of being under pressure in the middle of the COVID-19 pandemic and subsequent lockdowns across the country. India's largest two-wheeler manufacturer by volume, Hero MotoCorp announced that the company had managed to reach 95 per cent of wholesale dispatch numbers of July 2019, with despatches of over 5 lakh units in July 2020. Honda Motorcycle and Scooter India, despatched over 3.2 lakh units in July 2020, registering a strong growth of 53 per cent over despatches in June 2020. In fact, July 2020 is the first instance of Honda Two-Wheelers crossing three lakh unit despatches in a month after the government initiated the unlock protocol. Bajaj Auto also despatched over 2.5 lakh units in July 2020.

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The Hero Splendor is the country's highest-selling motorcycle

The pick-up in two-wheeler sales is attributed to pent up demand, as well as the focus on personal mobility gaining traction with movement restrictions across the country. With a countrywide lockdown in place since late March, and with zero sales in the months of April and May, the uptick in July sales is a cause for cheer. However, how sales perform in the coming months, as demand is slowly fulfilled, will be important for the future of the industry amidst the challenges to the economy brought on by the coronavirus pandemic. And the sense of caution is evident in India's leading two-wheeler manufacturers.

Also Read: Hero MotoCorp Sales Back To 95 Per Cent Of Corresponding Month Last Year

"While there is cautious optimism on the demand trajectory going forward, sales continue to be impacted by the micro lockdowns in several parts of the country. For the growth momentum to continue, it would be pertinent for state and local authorities to provide a stable and consistent business environment as the situation evolves," a statement from Hero MotoCorp said.

Also Read: Honda Registers 29.32 Per Cent Drop In Year On Year Sales

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The Honda Activa is India's highest-selling scooter

Reflecting the sense of cautious optimism, Honda Motorcycle and Scooter India's Director of Sales and Marketing, Yadvinder Singh Guleria said, "Honda's sales momentum continues to accelerate in the three months since resuming operations - jumping 400 per cent from 54,000 in May to 2 lakh units in June, and now breaching the 3 lakh mark. Intermittent regional lockdowns across India slowed down the retail momentum gained in June as the percentage of operational network dropped to 80 per cent in July. While the physical inventory level at our dealerships is less than a month's sales, giving us confidence is the growth in new enquiries on the back of increasing acceptability of Honda's newly launched BS-VI models with advanced technology and features."

Also Read: TVS Registers 9.56 Per Cent Drop In Sales

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TVS two-wheeler sales pick up in July 2020

TVS Motor Company's sales in July 2020 stood at over 2.5 lakh units, a growth of 27 per cent over June 2020 sales, but a drop of 9.56 per cent over July 2019. TVS reported a net loss of ₹ 139.07 crore in the quarter ended June 2020, with the company's quarterly revenue skidding by a whopping 67.96 per cent, from ₹ 4,469.8 crore in the review period last year, to ₹ 1,434.3 crore in the same period this year.

Also Read: Royal Enfield Records 5.6 Per Cent Growth Over June 2020; YoY Sales Drop By 36 Per Cent

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The Royal Enfield Classic 350 is the brand's highest selling motorcycle model

Motorcycle brand Royal Enfield clocked over 40,000 unit sales in July 2020, a 5.6 per cent growth over June 2020, when the company had despatched 38,065 units. However, compared to July last year, the company's July sales were down 26 per cent. Even as Royal Enfield attempts to establish itself as a global leader in the mid-size motorcycle segment (350-750 cc), exports have been under pressure in July, despite the company's Interceptor 650 becoming the UK's bestselling motorcycle in June 2020, and the brand making rapid progress in new markets, including South East Asia.

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With several new motorcycle models planned over the next couple of years, and with the all-new Royal Enfield Meteor 350 expected to generate new interest, the momentum is likely to continue. However, the sense of cautious optimism prevails, at least until the festive season kicks in towards the end of September, which usually heralds a period of high volumes in sale, particularly in the domestic market.

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