As October draws towards a close, the motorcycle market is set to witness record sales figures, with market leader Hero Honda tipped to report 3.8 lakh units.
However, overstocking at dealerships may see sales dropping in the next two months
MUMBAI: As October draws towards a close, the motorcycle market is set to witness record sales figures, with market leader Hero Honda tipped to report 3.8 lakh units and rival Bajaj Auto at a little over 2.5 lakh.
Top industry sources say that TVS Motor, in comparison, will account for around 70,000 bikes.
In effect, this means that October will see sales of 7 lakh motorcycles from the top three manufacturers. What is emerging as a matter of concern, though, is that dealers fear a tremendous buildup of stocks as companies scramble to report record numbers in this festive season.
It is not entirely clear how inventories have been piling up because manufacturers have reiterated from time to time that they are keen on reducing floating stock levels.
In fact, vendors have hinted that order books in November will show slightly smaller numbers and December could actually see a sharp nosedive in sales.
“The correction is only inevitable as production is fast exceeding actual demand in the market,” they say.
High interest rates have, over the last few months, impacted buying sentiment and this has caused both Hero Honda and Bajaj to substantially cut prices of their 100cc offerings like the Splendor and Platina.
Bajaj is, of course, pinning its hopes on the recently launched 125cc XCD, which is expected to sell 50,000 units in October and break into Hero Honda’s monopoly in this value/executive segment (with an ex-showroom tag of Rs 41,000) where the Splendor rules the roost.
Indications are that November will see sales of Hero Honda bikes stabilise more realistically at the 3.2 lakh mark.
If Bajaj has to maintain the momentum at 2.5 lakh bikes (including exports), the XCD will have to play the critical growth driver.
If it does manage to wean away customers from Splendor, there could be an interesting tug of war in store.
On the other hand, if the XCD does not catch the fancy of the market, there will be no stopping Hero Honda in the value segment.
TVS Motor is hoping to recapture big numbers here with the launch of the 125cc Flame in December but it is not clear if the bike will be priced as competitively.
Sources say it is more likely to be positioned closer to the Rs 44,000 (ex-showroom) mark.
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