Demand for two-wheelers falls for first time in 42 months

Demand for two-wheelers falls for first time in 42 monthsIndian two-wheeler industry suffered decline in sales for the first time in more than three years in August this year, mirroring the prevalent slowdown in the country's economy.

Manufacturers sold a little less than 1.2 million scooters and motorcycles in August this year, 5.5 per cent less than the 1.3 million sales in the corresponding month of 2011.

Almost all major two-wheeler companies, including Hero MotoCorp, Bajaj Auto and TVS, reported sharp decline in sales last month. Only two manufacturers, viz. Honda Motorcyles and Suzuki, bucked the trend, thanks to the launch of their new 100cc mobikes around two months back.

The last time two-wheelers industry had suffered monthly decline in sales was in January 2009, when sales had slipped 4 per cent year-on-year.

Pawan Munjal, managing director & chief executive of Hero MotoCorp, admitted that the past two months were very tough for the industry, added that he hoped that retail sales would increase during the upcoming festive season.

Speaking on the topic, Mr. Munjal said, "The past two months have been really tough. We have seen a drop in retail sales and our stocks are rising. We are betting on the festive season to revive the market."

Industry executives are blaming increasing petrol prices and high interest rates for the decline in sales of two-wheelers. Petrol prices have increased sharply over the past months, while interest rates are at 24 per cent compared with 10-12 per cent rate of interest for cars.

Poor monsoon has also played its part in the dragging demand for the vehicles down as it affected the purchasing power of people in rural areas - the primary market for two-wheelers.