Following the news that the cumulative two-wheeler sales of the top four original equipment manufacturers (OEMs) in India declined 16.5% year-on-year in November 2019;

Animesh Kumar, Director of Automotive Consulting at GlobalData, a leading research and consulting company, offers his view:

“After a satisfactory festive season in October where most OEMs witnessed high dispatch volume, November turned out to be sluggish, with the two-wheeler industry witnessing a significant decline in sales.

“The cumulative sales volume of top four OEMs i.e., Hero MotoCorp, TVS Motor Co, Bajaj Auto and Suzuki Motorcycles India, declined to just over 936,000 units in November 2019 compared to more than 1,121,000 units in November 2018. Slowing economic growth, stringent auto financing and the cost-burden from the bundled insurance package have marred the two-wheeler market the entire year.

“However, the fact that the two-wheeler companies managed to knock down significant BS-IV inventory between September and November 2019 is a major positive. Honda Motorcycle and Scooter India (HMSI) claims to have reduced its inventory to just 24 days in November 2019. November remained a month focused on further inventory reduction of BS-IV vehicles, production planning and launch of new BS-VI variants. The significant inventory reduction five months ahead of implementation will help in smooth transition to BS-VI.

“BS-VI two-wheeler variants that debuted in November include Honda SP125, Hero Splendor iSmart, Yamaha FZ-FI and Yamaha FZS-FI. Most OEMs have either launched or announced their BS-VI variants for flagship models. Honda Activa 125 BS-VI was launched in September; Jawa motorcycles are already equipped with a BS-VI compliant engine, while Royal Enfield Himalayan BS-VI will be launched in January 2020. Some of the top selling BS-VI compliant two-wheelers available for sale include Honda Activa 125 BS-VI, Honda SP125 (replacing Honda CB Shine SP), TVS Jupiter BS-VI, TVS Apache RTR 200 4V, TVS Apache RTR 160 4V, Hero Honda Splendor iSmart, Yamaha FZ-FI, Yamaha FZS-FI and Vespa 125.

“Though BS-VI models boast of higher torque and mileage, the fact that the current BS-VI models are 8-14% costlier may discourage pocket-conscious customers. Overall, the prices of two-wheelers are expected to witness a 10-15% increase post the implementation of BS-VI. While the two-wheeler manufacturers are aggressively changing their portfolio in preparation of the implementation of BS-VI emission norms in April 2020, the short-term outlook is unlikely to be promising due to factors including shaky economic situation, poor consumer sentiments, difficulty in securing loans and increase in cost of ownership.”