Business

Double-digit decline in two-wheeler wholesales

Hero Motocorp said its domestic sales last month declined by 15.8% to over 5.05 lakh units. Reuters

Hero Motocorp said its domestic sales last month declined by 15.8% to over 5.05 lakh units. Reuters  

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Vehicle makers resort to inventory adjustment in November, ahead of the transition to BS- VI

A majority of two-wheeler makers, including Hero MotoCorp and TVS Motor, on Monday, reported a double-digit decline in their domestic wholesale numbers for November, as vehicle makers resorted to inventory adjustment ahead of the transition to BS-VI compliant vehicles.

Market leader Hero Motocorp said its domestic sales last month declined by 15.8% to over 5.05 lakh units. The company had posted sales of more that six lakh units in November 2018.

“Following record festive retail sales in October 2019 and lowest-ever inventory in two-years, the November 2019 despatch numbers reflect Hero MotoCorp’s intent to ensure a smooth transition to BS-VI norms,” the company said in a statement.

Stating that it had scaled up the production of its BS-VI vehicles, the company added that it had stopped production of more than 50 variants of its BS-IV range of products. The company, however, saw a 17% increase in vehicle exports to 10,781 units.

Chennai-headquartered TVS Motor Company said its domestic two-wheeler wholesales last month dropped 26.5% to about 1.91 lakh units from about 2.60 lakh units. Two-wheeler exports, however, grew by 24% from 46,889 units in November 2018 to 58,128 units in November 2019. “Shifting of Diwali season to the earlier month and planned adjustment of BS-IV stocks is reflecting in the sales growth difference between November 2018 and November 2019,” the company said.

Likewise, Bajaj Auto posted a decline of 14% in domestic two-wheeler sales to over 1.76 lakh units as against about 2.05 lakh units in the year-ago month, while Honda Motorcycle & Scooter India Pvt. Ltd. said its domestic sales were down 5%.

Suzuki Motorcycle India, however, saw a jump of 14.6% in monthly domestic sale at 60,855 units during November 2019 as compared with 53,058 units sold in November 2018. On Sunday, the country’s largest car maker, Maruti Suzuki India, had posted a decline of 3% in domestic passenger vehicles sales to over 1.41 lakh units as against over 1.46 lakh units in the year-ago month. Similarly, Honda Cars said its sales were down nearly 50% to 6,459 units, from 13,006 units in November 2018.

Rajesh Goel, senior vice-president and director – Sales and Marketing, Honda Cars India Ltd.,said, “Our sales numbers are better than our plan for the month. We are in the last leg of our BS-IV run-out and accordingly supplies had to be optimised as we progress towards BS-VI transition model-by-model sequentially.” However, for Hyundai Motor India, wholesales were up by 2% to 44,600 units, while Toyota Kirloskar Motor posted a decline of 22% in domestic sales at 8,312 units during the month under review. The company’s deputy managing director N. Raja, said, “We have consciously lowered the volume of vehicles sold to dealers to ensure lean inventory/avoid high market offers, we are adjusting our production to ensure we do not put any excess burden on our dealerships before the shift to BS-VI in April 2020.”

He added that positive sentiments in the market had continued to November which had reflected in the spike in customer orders across all models. “The boost in customer orders for all models has sustained this month even after the end of festive season. Customers are aware of the model year price rise in January and the significant price hike of diesel vehicles by 15-20% post BS-VI transition. This pre-buying pull of BS-IV vehicles has helped us in pushing retail sales and also enabling successful runout of products before shift to BS-VI,” he said.

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Printable version | Dec 16, 2019 5:30:12 PM | https://www.thehindu.com/business/double-digit-decline-in-two-wheeler-wholesales/article30142098.ece

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