Wheeler Automobile Industry
Two-wheeler sale of Indian players is dominated by the domestic market and, within it, bymotorcycles. After growing at a sharp clip from the late 1990s, motorcycle sales witnessed a7.8% drop in volume in 2007-08, due to falling domestic demand as a result of rising interestrates and many private sector banks reducing their retail lending exposures. 2008-09 saw amodest increase in motorcycle sales of 4%, driven largely by growth in cash sales. Even so,sales of motorcycles (both domestic and exports) in 2008-09 has been lower than what it wasin 2006-07, before the slowdown hit thissector. The chart below depicts the datafrom 1998-99.
Motorcycles: DomesticSales for the Industry
The company classifies motorcycles intothree segments, based on consumer categories and approximate price points.These are:a)
These are typically100 cc motorcycles at a price point in theneighborhood of Rs.35000. b)
This largelycomprises 100 cc to 135 cc motorcycles, priced between Rs.40000 to Rs.50000.c)
These are sleek, high performance, with price points in excess of Rs.50000.
()Mark etCap.(Rs.cr.)SalesTurnoverNetProf itTotalAssetsHero Honda
45.2141.38-114.82-5.18If the domestic motorcycle market is segregated as above, it becomes clear that industry salesshowed significant ups and downs in 2008-09. Chart B plots the data for the industry as awhole. The industry as a whole was growing at a fairly reasonable rate in the first half of thefiscal year. Average monthly sales during Q1 2008-09 were 3.3% higher than that of 2007-08; and in Q2 2008-09 it was 5.8% greater than the previous quarter. Then came the hit in