Two wheeler sales go from bad to worse

Reliance Money

November 2008 saw two-wheeler companies reporting muted numbers, thereby reporting
negative growth. Despite new launches by two-wheeler majors, sales volumes of companies were disappointing, with Hero Honda bucking the trend with a minor growth as against steep falls recorded by its immediate peers Bajaj Auto and TVS Motors.

The main reasons behind the disappointing sales volumes of the companies during the month were on account of, (i) primarily due to festive season falling in the month of October-November last year instead of September-October this year (ii) inventory pile up at dealer bases, and (iii) due to credit squeeze, stringent financing norms. Hero Honda’s sales volumes were hit minimum as compared to its peers as it is generating volumes in the rural and semi-urban areas by way of cash sales.

Exports on the other hand continue to grow robustly, in turn offsetting the slump in the domestic sales volumes. Exports of BAL and TVS grew in excess of 45 percent and 100 percent respectively. We believe that exports will continue to play a very important role, at a time when the domestic market has been witnessing challenging scenario.

Bajaj Auto (BAL) overall sales down 32.3 percent

BAL’s overall sales for the month of November 2008 have registered a fall of 32 percent to 159,747 units as against 235,797 units in the month of November 2007. This steep fall in sales was on the back of poor performance of motorcycles segment, which registered a fall of 37 percent to 131,681 units.
On a cumulative basis for the period April-November 2008 the motorcycle sales of the

company reported a negative growth of 4.6 percent to 1415,639 vehicles, which was due to strong performance of 125cc bikes. However, on a month-on-month basis the motorcycle sales of the company reported a fall of 19.6 percent.

BAL’s three-wheeler sales for the month of November 2008 registered a growth of 13 percent to 27,326 vehicles on account of lower base in the corresponding period last year. While, on a cumulative basis, three-wheeler sales recorded a fall of 5.9 percent. Exports for the month of November 2008 reported strong growth momentum and registered an impressive growth of 46 percent to 67,397units as compared to 46,295 vehicles in the corresponding month last year.

In order to push declining volumes, BAL has announced that they will be launching a new motorcycle each month for the coming six months starting January 2009. Apart from this the company has also announced that they will be allocating special impetus towards the exports which have been growing robustly from the past few months. Apart from the two-wheeler launches, the company also has plans of launching two commercial vehicles in the current fiscal.

Hero Honda sales up 0.5 percent

Hero Honda Motors has posted a flattish growth in its sales volumes for the month of November 2008. The company reported a growth of 0.5 percent to 289,426 vehicles as against 288,027. While, on a cumulative basis the overall sales of the company reported a growth of 13.4 percent to 2,508,214 vehicles. HH’s sales volume has taken minimum hit compared to its peers, mainly due to the launch of four bikes during the month of October 2008. Hero Honda’s bikes Passion and Splendor continued to show strong performance thereby pushing sales volumes of the company.

TVS Motor sales fell 13 percent

TVS Motors registered a fall of 13 percent in its sales volume during the month of November 2008. The company sold 98,402 vehicles in the month of November 2008 as against 112,766 vehicles in the corresponding month last year. Overall fall in the sales volumes was on account