New Delhi: Liquidity constraints along with depressed farm incomes and natural calamities have continued to decelerate two-wheeler sales.
segment is considered to be a barometer for rural demand but has been
dented along with the overall automobile sector from a consumption
slowdown which is a culmination of several factors like high GST rates,
farm distress, stagnant wages and liquidity constraints.
inventory pile-up at the dealership level and stock management of
unsold BS-IV vehicles have become a problem for the sector.
lag effect in rural turnaround is imminent from the sales figures of
several two wheeler companies for August," Grant Thornton India LLP
Partner Sridhar V. told IANS.
"Festive season could provide a revival in consumer sentiments. However, it will take a few months to see an upturn."
to Madhavi Arora, Economist with Edelweiss Securities: "Depressed farm
income along with natural calamities in several parts of the country has
hit the rural market hard and the impact has percolated to two- and
"However, healthy monsoon rains and festive seasons might bring in some respite to the sector."
Bajaj Auto's overall sales including motorcycles and commercial
vehicles plummeted by 11 per cent to 390,026 units sold in August from
437,092 units off-take in the corresponding period of last year.
Similarly, TVS Motor Company registered sales of 290,455 units during the month under review from 343,217 units in August 2018.
Motorcycle & Scooter India closed August 2019 with total sales of
452,389 units down from an off-take of 614,476 units during the
corresponding period of last year.
Two-wheeler major Hero
MotoCorp sold 543,406 units of motorcycles and scooters during the month
under review from 685,047 units sold in the month of August 2018.
Monday, the Society of Indian Automobile Manufacturers said the market
has still not responded to the various measures initiated by the
government to reverse the slowdown that has dented the industry.
to the dismal sales numbers of various companies for August, SIAM
President Rajan Wadhera said the series of announcements on credit
availability and reducing the cost of credit that were made do not seem
to have percolated down to the NBFCs which support the bulk of finance
for the automotive industry.
To help revive the sector, Finance
Minister Nirmala Sitharaman on August 23 had announced that the
government departments would be allowed to buy new vehicles, automobiles
purchased till March 31, 2020 could avail the benefit of additional
depreciation of 15 per cent, with total depreciation up to 30 per cent,
and BS-IV vehicles bought till March 31, 2020 would remain operational
for their entire registration period.