Two-wheeler sales skid in April on rural slide

Last month sales of two-wheeler market leader Hero MotoCorp posted its biggest monthly drop of 2015 as April sales marked the third decline for the company in four months of the year.

The Delhi-based company reported sales of 533,305 units in April, a decrease of nearly 7 per cent when compared to 571,054 units sold in the same month a year earlier.

Similarly other players like Honda Motorcycle and Scooter India, Suzuki Motorycles and Mahindra Two Wheelers have also reported subdued sales performance last month.

The reason behind this performance can be attributed to the severe slowdown in the rural demand situation. While about half of Hero MotoCorp's sales gets generated from urban and semi urban market than other significant half is dependent on the rural markets.

"The rural demand for automobiles has been adversely impacted by unseasonal rains witnessed in the month of March. Poor crop realization and a slowdown in rural wages have pulled back the rural economy, impacting retail off-takes in markets such as Bihar, Madhya Pradesh and sugarcane growing areas of Uttar Pradesh and Maharashtra", noted a spokesperson from Hero MotoCorp.

Entry level bikes which make up 50 per cent of the total motorcycle sales remain the hardest hit as a significant portion of its portfolio is exposed to the rural market. Mileage plays a crucial role in the rural areas influencing buying.

Y S Guleria, vice-president (sales and marketing), Honda Motorcycle and Scooter India, said, "We see there is a slowdown in the entry segment, impacting sales from semi-urban and rural areas. A few pockets are being disturbed due to inclement weather; standing crops are being destroyed. The buying sentiment is down. Scooters are largely urban-driven; so, there is no impact there."

For Honda sales of motorcycle in April at 131,291 units stood lower than 131,377 units sold in the same month last year. HMSI generates motorcycle volumes from its Dream series and Shine, all of which are under 125cc engine segment. Scooters which are primarily sold in the urban markets make up 58 per cent of its total monthly volume.

Chennai-based TVS Motors defied the trend with a growth of 13 per cent during April to 162,516 units as against 143,434 units sold in the same month last year. Motorcycles as well scooters grew at almost the same pace during the month.