With motorcycle sales during April-October declining 2.57% on a year-on-year basis, market leader Hero MotoCorp has seen its market share come under pressure. The company, which consistently clocked above 50% market share month-on month since November 2014, has seen it coming under 50% to 48.89% this October.
In October 2014, its share had slid to 48.69% after which it had again started to rise, to touch a high of 55.41% in December 2014. In the current fiscal, it maintained market share in the rage of 53% during April-June, after which it started sliding to touch below 50% in October.
However, the trend shows that no major player is gaining at the cost of Hero. Its main competitors, Bajaj Auto and Honda Motorcycle and Scooter have also not seen consistent growth during the period. However, During July-October the two have gained a few percentage points but not consistently. Therefore, it remains to be seen whether in the next few months Hero regains its market share.
Hero MotoCorp’s motorcycle sales have witnessed a month on month decline in four of the seven months this fiscal, including October. In the first seven months, motorcycle sales saw a decline of 2.57% over the same period last year, while scooter sales saw a growth of 13.94%. In October this year, motorcycle sales saw double-digit growth for the first time since March, mainly driven by festive demand for the Navratras and inventory stocking for Diwali sales.
Motorcycle sales have become a worrying factor for Hero MotoCorp as almost half of its sales in the segment come from the rural market. Moreover, while the demand for motorcycles has been low across urban and rural markets, rural markets have been more impacted.
Speaking to analysts after the second quarter financial results, Ashok Bhasin, head of sales and marketing, said that in the first half of the financial year, both urban and rural markets for motorcycles got impacted. “I would say in rural the decline would have been slightly higher maybe more like 8-10% and in urban areas it would have been a lower number of 2-3%, so both have got impacted. Rural of course have got impacted more, so indicated by many other indicators from rural demand,” he said. A recent Icra report on the Indian two-wheeler industry estimates the industry to grow by a meagre 2-4% in volume in the entire 2015-16.
In order to climb back to its dominant position in the overall two-wheeler market, Hero MotoCorp has brought in two new indigenously developed scooters, as the scooter demand has been strong in recent years. The scooter segment, which is dominated by Honda Motorcycle and Scooters with a market share of over 50%, has grown in double digits for over a year, barring a few months.
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