The COVID-19 pandemic that began to spread just over a year ago has taken over the world. The virus, which has earned the distinction of being among the top dangerous and contagious diseases that humans contract, has destroyed the economy across the globe. Indian Prime Minister Manmohan Singh rightly stated If we don’t cautiously tackle the virus, it could send us back to the past, as it has done for the majority of the nations that attempt to stop the decline of their economy.
The epidemic has been brutal to the majority of sectors around the world. However, the auto industry in India, which was already stressed, has recovered quicker than many would have. The two-wheeler market is under stress. The numbers released by the manufacturer are impressive even in such a short time.
The latest figures published by the top two-wheeler manufacturers have caused industrialists’ heads to turn; still, few experts are taking the figures as a sign of the slow recovery in the economic growth of the nation in the context of COVID-19 and the months-long lockdown that was triggered through the exact.
Let’s take a look at some of the sales figures of the most reputable two-wheeler makers for October 2020.
Hero Motor Corp., the leading manufacturer of two-wheelers in the United States, was the brightest, with an unprecedented number of sales. The company recorded its highest-ever monthly sales figures of 8.06 lakh units of motorcycles and scooters in October 2020. This is 35 percent more than the same month in 2019 when the company sold 599,248 units.
TVS reported an increase of 24 percent in sales for October, which was 382,121 units, compared to 308,161 units in October. The company’s domestic sales increased by 19 percent, with 303,380 units in October 2020, compared with 252,684 units in October. The company’s motorcycle sales increased by 38 percent, up to 173,263 units since October 2020. This is compared to 125,660 units during the same month in the prior year.
Bajaj Auto reported an 11 percent increase in the total sales of its vehicles, with motorcycle sales increasing by 18 percent at 470 290 units as compared to 398,913 units sold in January. The company also announced that its top brand, Pulsar, reported the sale of 170,000 units.
It was apparent that the OEM manufacturers were on a cruise after having such staggering numbers during the once-in-a-lifetime pandemic. However, the motive behind this surge is due to the holiday mood and the growing demand for private vehicles in order to avoid crowds of public transportation during the epidemic.
“The demand for two-wheelers have seen an upward swing primarily on account of the desire to have an owned commute, especially in the time of pandemic, and reduce the dependence on public commute to the extent possible. The spend capacity at the rural and semi urban centers have also increased the demand for two-wheelers. The trend seems to be strengthening around the festival period over October and November,” said Sridhar V., the partner of Grant Thornton Bharat LLP.
He said that the introduction of a new car lineup within the two-wheeler market, together with the increased demand, may also be a factor behind the increasing numbers of sales.
The Society of Indian Automobile Manufacturers (SIAM), which publishes wholesale statistics, reported that national sales of two-wheelers in October this year were 2,053,814 units as compared with 1,757,180 units in October 2019, with an increase of 16.88 percent.
Rajesh Menon, director general of SIAM, Commenting on the trend, said October was a month of continued growth of sales and significant improvements in certain segments owing to festival-related demand.
Mood Of The Consumer
In all honesty, could this mean that we’re out of recession, and people are willing to forgo money to purchase two-wheelers, which are still seen as a sign of wealth in a volatile moment?
The answer is probably no. It is a common practice for auto manufacturers to disclose the wholesale dispatch number on an annual basis. Wholesale dispatch numbers are the number of dispatches made by factories manufacturing vehicles to dealers and do not reflect the quantity of cars purchased by buyers.
The retail figures which typically gauge the pace of consumer behavior as they reveal the number of cars sold to customers by dealers. FADA is an apex national body that represents dealers in India. Every month, it releases retail numbers that are different from SIAM figures.
According to the latest FADA report, even though registrations of vehicles were up 5.11 percent month-on-month, it fell by 24 percent on an annual basis. When it comes to the two-wheeler segment, The enrollment for cars dropped by 26.82 percent from 14,23,394 last October year to 10,41,682 in the year ahead.
When inquired about the numbers reported in response to Vinkesh Gulati, president of FADA, He said that the numbers do not reflect the reality.
According to him, these numbers indicate a gradual growth in dealers’ inventory, which was in disarray because of the lockdown and the change from BS-IV to BS-VI standard for emissions. He said that since August, the situation has been improving from the supply chain perspective.
In announcing the record-breaking figures and the wholesale figures of certain OEMs, he stated that dealers prior to the holiday and wedding seasons are trying to build up their inventory. However, this can’t be the norm, he ssaid
In a statement, citing a decline in GDP and job losses, as well as higher wages, he added, “We are not sure that the kind of growth trajectory we are seeing today will continue post the festive season.”
The FADA’s data indicated that the causes that led to a decline in the number of vehicles registered in comparison to last year’s is the fact that Navratri and Diwali were both in October in the previous year, while the current time Navratri and Diwali occur in November.
The only segment that saw positive signs was the registration of tractor vehicles, which showed growth of 55.53 percent growth year-on-year.
In all, Hero MotorCorp recorded 14 lakh motorcycles and scooters in retail sales over the festive season that just ended.