Two-wheeler and CV sales end 2017 in top gear
Shrugging off the impact of demonetisation, two-wheeler and commercial vehicle (CV) manufacturers ended the 2017 calendar year on a high note. The monthly sales data released by the companies on January 2, show that the sales of these vehicles advanced at a fast clip in December 2017 over the year-ago-period as last year’s low base, which came after the note ban in November 2016.
While steep discounts and attractive finance schemes drove truck sales in top gear last month, a sales push by the two-wheeler companies, led to higher twowheeler dispatches. Volumes are expected to remain buoyant till the end of this year as manufacturers go all out to push sales and meet the year end targets.
Automobile sales in India fell 18.66 per cent in December 2016, the steepest in 16 years as severe cash crunched forced consumers to put off purchase. The drop was the highest since December 2000, when it had fallen 21.81 per cent, according to Society of Indian Automobile Manufacturer (Siam).
Among the two-wheeler companies, market leader HeroMoto Corp led the December sales tally. The maker of Splendor and Glamour reported a volume growth of 43 per cent over the same period last year. The Pawan Munjal-led firm was one of the worst hit by the note ban as one in every three motorcycles of the company sell in rural India, where the impact was most pronounced owing to the region's high dependence on cash.
A Reserve Bank of India (RBI) report of 2016 on branch authorisation policy classified 93 per cent of rural centres in the country as unbanked, with the population dependent on roving banking correspondents and on distant urban or semi-urban branches. Hero's sales last year skidded by 34 per cent to 330,202 units over December 2015 dragging down the overall sales volumes by 10 per cent in the same period.
Honda Motorcycle and Scooter India, the second in the pecking order in the two-wheeler segment, has yet to report December sales. It was an equally impressive month for others - while sales at Punebased motorcyclemaker, Bajaj Auto, grew 6 per cent, volumes at TVS and Royal Enfield increased at 35 per cent and 16 per cent, respectively. Albeit on a low base, volumes at Suzuki Motorcycles also went up 50 per cent.
Subrata Ray, an analyst at ICRA said, two-wheelers will continue to benefit from the low base effect and a pent-up demand from the time since the goods and services tax (GST) was implemented. Ray expects the segment to end the financial year with 8 to 10 per cent growth.
High dispatches, steep discounts on top of last year’s low base also drove commercial vehicles volumes in the fast lane. Sales at most firms expanded in high double digits. While market leader Tata Motors reported sales of 62 per cent, the Hinduja Group flagship, Ashok Leyland, saw its sales vroom 79 per cent.
However, on a relatively low base, truck and bus sales at Eicher Motors and Mahindra and Mahindra too advanced 49.5 per cent and 24 per cent, respectively, in December over a year ago.
“In 2017, the commercial sector has shown a good recovery after the headwinds and regulatory challenges in 2016,” said Girish Wagh, head of commercial vehicle business, Tata Motors.