Hero logs record Dhanteras sales, TVS does well as rural demand picks up

21 Oct 2017


The world's largest two-wheeler motorcycle manufacturer Hero MotoCorp has recorded its highest ever single-day sales of over three lakh vehicles on 17 October, Dhanteras day.

''This festive season has been a blockbuster for Hero MotoCorp. The highest-ever single day retail sales of well over three lakh units on Dhanteras comes on the back of what has been a season of new global records for Hero,'' a senior company official said.

The company registered the highest-ever numbers in monthly sales in September, of seven lakh vehicles, the official said.

Hero MotoCorp had also posted record sales of more than 20 lakh units in July-September 2017.

''I am not surprised by this. [In the] last two years, there hasn't been much demand from the rural areas due to slowdown owing to lack of good monsoons. So, there is a lot of pent up demand. Hero MotoCorp is very strong is these areas,'' according to Abdul Majeed, partner-automotive at PriceWaterhouse.

In April-August, most of the Hero MotoCorp and TVS Motor offerings in the segment showed an improvement. Volumes of Hero's HF Deluxe rose 33.65 per cent year-on-year to 931,046 units, that of its Splendor rose by 5.88 per cent year-on-year to 139,478 units while for Passion, volumes were up 2.11 per cent at 517,381 units.

In fact demand for economy segment motorcycles - an indicator of rural demand - is again on the rise in the first six months of the current financial year after staying subdued in the last three financials due to inadequate rainfall, the adverse impact of demonetisation and a ban imposed by the Supreme Court on the sale of BS III vehicles.

Hero has been the prime beneficiary of this development since it is the largest player in the segment and accounts for 55-60 per cent of total volumes.

Chennai-based TVS also saw volumes of its economy segment offering, Star City, rise by 10.51 per cent year-on-year to 95,803 units while that of its Sport was up 15.5 per cent at 118,602 units.

For Bajaj Auto's offering in the segment, Platina volumes were flat while that for CT fell 5.9 per cent. Volumes were expected to rise in FY17 but demonetisation led to a drop in demand in rural markets.

In the first quarter of this year, volumes in the segment began to grow on the back of renewed availability of cash in the market. The onset of the marriage season in May and farm loan waivers announced by different states further boosted sentiments in rural markets.

According to sector experts and executives, good rainfall in this year's monsoon, except for a few parts, will lead to a better harvest, which will further boost the sale of economy segment motorcycles.

''The automobile sector has witnessed gradual volume growth August onward and this was partly led by pre-festive inventory filling and positive rural sentiment in key markets. Our channel checks suggest above-average volume growth in key rural markets during this festive season,'' Motilal Oswal analysts said in a report.

According to the Society of Indian Automobile Manufacturers, volumes in the motorcycle segment increased 3 per cent in FY17, from a marginal decline of 0.26 per cent in FY16. Almost 50 per cent of the total volumes in the motorcycle segment is contributed by economy models.

Two-wheeler sales in the country have grown 10.14 per cent in the current fiscal year (April-September 2017) over the same period last year. While sales of scooters grew 17.26 per cent to more than 35.77 lakh units, those of motorcycles rose 7.71 per cent to more than 65.08 lakh units.

Last month, two-wheeler sales grew 9.05 per cent. While motorcycle sales climbed 6.98 per cent to more than 12.69 lakh units, scooter sales rose 13.19 per cent to more than 6.86 lakh units.

SIAM had attributed the growth to ''an indication of rebound'' in the rural market on the back of a good monsoon.

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