Before the current situation, the automotive sector was already reeling under the effect of a slowdown. Major factors like implementation of new stricter emission norms from BS4 to BS6 can be attributed to this slowdown. However, the impact created by the outbreak of covid-19 worldwide has had a much widening and detrimental effect on the sales of automobiles. The effect has been more prominent in case of two-wheelers in comparison to four-wheeler passenger vehicles.
Over the past couple of days, many auto manufacturers have been posting shocking drop in sales figures, the latest to publish a negative sales performance is Bajaj Auto. In March 2020, Bajaj sold 2,10,976 two-wheelers – a 35 percent drop from the 3,23,538 units it sold in March 2019. This figure is inclusive of both domestic sales and exports. If you consider just the domestic figures, the drop is ever more significant. In March 2019, Bajaj sold 2,20,213 two-wheelers in the domestic market, but it’s down by 55 percent with 98,412 units sold in March 2020. On the flip side, however, export numbers have seen a hike from 1,03,325 units in March 2019 to 1,12,564 units in March 2020 – up by 9 percent.
Year-on-year sales have seen a 7 percent decline. In April-March 2019, Bajaj sold a total of 42,36,873 two-wheelers, and that number fell to 39,47,568 in April-March 2020. Domestic sales went from 25,41,320 units to 20,78,348, down by 18 percent. Exports saw a 10 percent increase, with 18,69,220 units sold in April-March 2020 compared to the 16,95,553 units sold in the same period last year.
The one area where Bajaj need not worry much about, however, is the BS4 to BS6 transition hassle, as dealers have confirmed that they have managed to sell most of the BS4 stock before the April 1 deadline.
However, sadly that is not the case with the country’s largest two-wheeler manufacturer- Hero MotoCorp. As per a report from PTI, Hero MotoCorp, has over 1 lakh units of BS4 two-wheelers unsold with its dealerships across India. However, Hero MotoCorp has assured their dealers that the company will absorb all the unsold BS4 stock.
Hero MotoCorp has announced its sales results for March 2020 and the company registered a decline of 42 per cent in total sales (domestic+exports). The manufacturer’s sales for the previous month stood at 334,647 units as opposed to 581,279 units sold a year before in March 2019. The stark drop in volumes has been recorded as a result of the coronavirus lockdown across the country. Domestic sales stood at 316,685 units, a drop of 42.7 per cent as compared to 553,302 units sold in March 2019. On the other hand, exports stood at 17,962 units, a decline of 35.7 percent as against 27,977 units over March 2019
For March 2020, Hero’s motorcycle sales stood at 305,883 units, witnessing a drop of 42.9 per cent over 535,943 units sold in March 2019. Scooter sales meanwhile stood at 28,764 units last month, registering a drop of 36.6 per cent year-on-year as compared to 45,336 units sold the same month last year. The world’s largest two-wheeler maker also saw volumes drop for FY2020 with the company selling 64,09,719 units, a dip of 11 per cent as opposed to 72,39,460 units sold during the 2018-19 financial year.
Another major bike manufacturer which saw remarkable fall in sales figures is TVS. The company registered sales of 144,739 units in March 2020 as against 325,323 units in March 2019 which is a huge drop of 55 percent. Domestic two-wheelers sales were 94,103 units in March 2020 as against 247,694 units in March 2019, which is a drop of 62 per cent.
The company sold a total of 133,988 two-wheelers in March 2020 against 310,885 units sold in March last year, which is a drop of 56.9 per cent. Motorcycle sales included 66,673 units in March 2020 as against sales of 141,086 motorcycles in March 2019, a drop of 52.4 per cent. Similarly, scooter sales of the company were pegged at 34,191 units in March 2020 as against sales of 98,477 units in March 2019, again a drop of 65.28 per cent.
TVS’ total exports stood at 50,197 units last month as against sales of 76,405 units in March 2019, seeing a drop of 34.3 per cent. The company exported 39,885 two-wheeler units in March 2020 which is a massive drop of 93.69 per cent, with two-wheeler exports standing at 63,191 units in March last year. The three-wheeler sales of the company were 10,751 units in March 2020 as against sales of 14,438 units in March 2019 which is a decline of 25.54 per cent.
On the other hand, Suzuki Motorcycle India saw a drop of 39 per cent in its March 2020 sales. The company sold 40,636 units last month (domestic + exports) against 67,025 units sales in March last year. Similarly, the company sold 33,930 units domestically in March 2020 which is a drop of 42.2 per cent. The company says these are the figures till March 22, 2020 after which the company’s production was halted as per government directives, in a bid to fight the spread of Coronavirus.
However, the two-wheeler subsidiary of Suzuki Motor Corporation, Japan concluded the fiscal year on a positive note by registering a positive 5.7% growth over FY 2018-19. Cumulatively, Suzuki sold 790,397 units from April 2019 – March 2020, compared to 747,506 units sold in the corresponding period last year.
Another big player in the two-wheeler market, Honda was an exception and saw a positive growth during the said period. Honda Motorcycles & Scooters India (HMSI) has announced a total growth of 5% in the month of March 2020. The company registered sales of 2,61,669 units in the previous month, compared to 2,49,136 units in March 2019.
Honda Two-wheelers also announced a 11% growth in the domestic market during March 2020. The company stated that they recorded 2,45,669 units of sales in the domestic market in March 2020, against 2,22,325 units last year. HMSI’s two-wheeler export sales stood at 16,000 units during the same period.
Popular urban bike manufacturer Royal Enfield India showed similar trends. Royal Enfield saw a massive 44 per cent slide in its domestic sales for the month of March 2020. The company sold 32,630 units in March 2020 as compared to 58,434 units sold in March 2019. The company, like all the others, saw a dip in its sales because the sales activity stopped after the current Coronavirus lockdown was implemented on March 23, 2020.
The company saw a 33 per cent increase in its exports, selling 3,184 units last month as compared to 2,397 units exported in March last year. Combining exports and domestic sales, Royal Enfield sold a total of 35,814 units in March 2020, which is 41 percent less than 60,831 units sold last year.
Royal Enfield also released its sales data for FY19-20. The company sold a total of 656,651 units domestically in FY20 as compared to 805,273 units sold in FY19, which is a drop of 18 per cent. Similarly, total sales too saw a drop of 16 per cent in FY20 with total sales of 695,947 units. The company sold 826,089 units in total in FY19. The exports though showed a massive 89 per cent growth. The company exported 20,825 units in FY19, which grew to 39,296 units in FY20.
It will be interesting to see what the trend will follow post the scare of covid-19 scare and lifting of the nationwide lockdown. As the figures suggest sales have been pretty down and it will take some time for manufacturers to show some positive growth and we can expect that only after returning to normalcy from the current scenario and complete transition from BS4 to BS6.