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| India Infoline Sector Reports | Wed, 31-Dec-2003 10:17:37 IST (GMT+5:30) | |
| Automobile - Two Wheelers | ||
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July Update - August 7th, 2000 Bajaj Auto Motorcycle Sales Rise By 118%yoy Bajaj Auto has posted a rise of 118%yoy in sales of Japanese motorcycles in July to 32,696 units compared to 14,998 units in July last year. Motorcycle unit sales have overtaken sales of scooters, the company's main product, which remained depressed since the sales fell 31.3% to 32,879 units in July, from 47,868 units in the same month a year ago. The company said it recorded a 10%yoy growth in scooterettes with total sales of Bajaj Spirit and Sunny Zip rising to 7,124 units in July from 6,492 units sold in July last year. In the three wheeler segment, the company registered a 4%yoy growth with sales increasing to 15,903 units in July compared to 15,344 units in July last year. "Overall Bajaj Auto has recorded about 3%yoy growth in two and three wheeler sales in July 2000. The company sold 97,856 units against sales of 95,204 units in July 1999", the company said in a statement. Hero Honda Sales Up By 28% Motorcycle major Hero Honda has posted a rise of 27.8%yoy rise in volume sales to 73,806 units as compared to 57,768 units in the corresponding period a year ago. For the four-month period of April-July 2000, the company has done better by posting sales of 313,348 units as against 219,234 units, a rise of 43%yoy. TVS Suzuki Posts A Marginal Rise In Sales TVS-Suzuki posted a marginal rise in sales for the month of July 2000. The company sold 76,137 two-wheelers during the month as compared to 76,021 units in the corresponding period a year ago. The break-up of sales includes 32,854 mopeds, 28,907 motorcycles and 14,376 scooters. A point of concern is the fact that moped sales have fallen by 8%yoy during the month while that of motorcycles rose by a marginal 1%yoy. However, sales of scooters (mainly scooterettes) continued with their upward trend by posting a healthy 26% growth compared with July 1999. For the period April to July 2000, the company has posted a sales growth of 10%yoy with sales of 294,974 units. The break-up includes 128,673 mopeds, 117,981 motorcycles and 48,320 scooters. Motorcycles and scooters posted double digit growth during the period at 13% and 20% respectively. Mopeds showed a moderate growth of 3%. June Update - July 27th, 2000 Table 1 : Two-wheeler Volume Sales
Source: SIAM During the month of June 2000, the performance of the two wheeler industry has been on similar lines of May 2000. Barring the geared scooter segment, the two wheeler industry has done well to record consistent growth. The industry has witnessed a growth of 7.9%yoy, against a 31%yoy decline in scooter sales in June 2000. Seeing the current market conditions, Bajaj Auto has forecasted a fall of 19.1%yoy in scooter sales for the year to around 466,000 units. Currently, it is operating a five-day week at its Akurdi plant. However, there is one positive feature in all this. Exports of geared scooters has increased by a significant 79.2%yoy to 7,182 units. This could be attributed to the renewed interest in scooters in European countries like the UK. Bajaj Auto has seen exports rise to 1,647 units during the first quarter as against 611 units in the corresponding period last year. One model that is doing well in the export market is 'Legend'. The company is exporting around 500 units of these mainly to countries like Iran. LML too has doubled its exports to 2,163 units. The action has clearly moved on to the scooterette segment with all players positioning themselves well with products which have attracted customer interest. Bajaj's sales have increased after it introduced the 'Spirit' model. Recently, it also increased the availability of its 'Saffire' range. The company is targeting a rise of around 61%yoy in scooterette sales by the year end. Kinetic's new model 'Style' is selling well at around 4,000 units per months thanks largely to its higher powered engine (75cc). The company has also upgraded its entire range of scoterettes and introduced the lean-burn technology to improve upon their fuel efficiencies. Exports of scooterettes has also picked up. During the first quarter, Kinetic Motor exported 3,288 units, a rise of 53%yoy. Bajaj Auto exported 1,374 units as against 444 units in the corresponding period last year. The motorcycle segment continues to do well by outperforming the average industry growth by two and a half times. The leader here, by a wide margin, is Hero Honda. The company has increased its market share to 48% from 42.4% last year. It is clear on its way of achieving its sales target of 1mn units this year. The number two in the market, Bajaj Auto, is trying its best but is still a far way behind. During the first quarter, the Kawasaki range of motorcycles posted a rise of 87%yoy in sales to 85,266 units. The rest came in from sales of the step-thru model M-80, which has risen by a modest 10%yoy. The company has forecasted a sales growth of 78.7%yoy for Japanese motorcycles and only 9%yoy for M-80. The third largest player in the segment, TVS Suzuki, is lagging behind the average industry growth. The large number of two-stroke models in its portfolio is causing some cause for concern for the company. In response to this and also in line with current emission norms, the company has launched the 'Fiero' model. Sales of the new 4 stroke, 150 cc model, currently available in Maharashtra, Karnataka, Kerala, Rajasthan & Delhi, has crossed 4,000 units in June and production is being ramped up to launch the product in other parts of the country by September 2000. The only company to lose out is Escorts Yamaha. The problem for the company is its two-stroke models. Though, in recent months, the company has introduced two new models in the 4-stroke range, it will be difficult for it to capture market share from others. With demand shifting towards the scooterette segment, sales of mopeds have witnessed a modest growth of 6.8%yoy. TVS Suzuki is the largest player here with a market share of 61% as against 60% in the corresponding period last year. Most of its sales come from the south of the country. During the period, the company has launched a new heavy duty 'XL' model in order to cater to customers who would like a sturdier and a more powerful moped. The other two players have not been doing very well in the domestic market. Majestic Auto, in particular has posted a fall in sales in the domestic market. If we remove the export figures from the above table, it is observed that sales have fallen by 23.5%yoy to 16,313 units. In fact, exports of mopeds have risen significantly during the period under consideration. All the three players have exported 11,503 units as compared to 4,917 units a year ago. Table 2 : Three-wheeler Volume Sales
The growth in the three wheeler industry has remained more or less stagnant. The only player to do well has been Bajaj Auto, which is slowly shifting away from two-stroke diesel three-wheelers and introducing models run on more environmentally friendly fuels like CNG. Recently, it launched a new three CNG-run wheeler in Delhi. At present, all of Bajaj's good carriers have a four-stroke engine and it expects to convert all two-stroke passenger carriers by December 2000. This will enable it to comply with strict environment norms enacted by some state governments. Bajaj is also separating its dealership network of three wheelers from that of its two-wheelers. All this developments, the company feels will help increase sales of its three-wheelers by 11.6%yoy during the year. One other manufacturer to do well in the market is Piaggio-Greaves. It has now come to occupy a market share of around 5%. Bajaj Tempo's sales have been affected by a month long strike at its factory premises. Sales of Scooters India have suffered after the UP government put restrictions on registering its diesel 'Vikram' range of three-wheelers in the state. May 2000 update - July 4th, 2000 Table 1 : Two-wheeler Volume Sales
Source: SIAM The script for May 2000 remains pretty much the same. The geared scooter segment continues to do badly while sales in the motorcycle and scooterette segment continues to be good. One has just to see the performance of the three biggest players in the market. Bajaj Auto Ltd, the largest two & three wheeler manufacturer, has seen a significant 49.5%yoy growth in motorcycle and 62.4%yoy growth in the scooterette (Sunny/Spice) segments respectively, sale of scooters registered a fall of 10.2%yoy. Clearly, all the finance schemes and advertising campaigns doesn't seem to have created much of an affect on scooter sales. Sales in the motorcycle segment has come in mainly from the Japanese motorcycle segment with sales of its M-80 model continuing to stagnate. As a result of the spurt in motorcycle sales, Bajaj Auto is planning to invest Rs8bn in the next 4 years to enhance the motorcycle manufacturing facility at the Waluj and Chakan plants. By September 2000, the capacity is expected to reach 50,000 bikes a month. Hero Honda continues to rule strong in the motorcycle segment with no signs of it loosing steam as yet. The third largest player, ie TVS Suzuki's two-wheeler sales rose to 69,634 units during the month as compared to 58,642 units in May 1999. Sales were, however, lower than that of April 2000 mainly because of the fact that the company's plant was shut down for a week for maintenance purposes. In the scooter segment,
LML has continued to post negative sales growth as its entire
portfolio consists of geared scooters. In the motorcycle segment,
TVS Suzuki's sales growth has been lower than that of the industry
average. The company is a late entrant in the 4-stroke segment and
this seems to have dampened demand for its 2-stroke products.
However, its new offering 'Fiero' has been able to garner a good
initial response from customers. Similar has been the case with
Escorts Yamaha. Till recently, it had a single product in the
4-stroke category which again seems to have affected sales of its
products in the northern and eastern states (UP and Bihar), a
traditional stronghold. In the scooterette segment, TVS's sales
continues to be strong. However, its sales growth in the moped
segment has been modest. Majestic Auto, another significant player
in the moped segment, has posted a negative sales growth. This is a
pointer to the continuing lacklusterness in the moped segment. On
the other hand, the scooterette segment continues to do well with
the launch of some new models in recent months. One of them has
been Kinetic's 'Style'. The model has been able to notch sales of
4,000 odd units per month.
The three-wheeler segment has barely managed to enter positive territory in the first two months of FY01. The market leader, Bajaj Auto, has started the year well with a 4%yoy rise in sales. Recently, it introduced a CNG three-wheeler in the state of Delhi and hopes to sell more of these in the months to come. The company will convert all its two-stroke offerings to 4-stroke during the year, which will enable it to comply with all conditions put up on the use of three-wheelers by various state and city governments. Another major player, Bajaj Tempo, suffered a fall in sales as a result of the strike in its factory premises which started in early May and went on till the first week of June. Sales of Scooters India have suffered after the UP government put restrictions on registering its diesel three-wheelers in the state. |
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