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Bike cos vroom on sales pitch

Bike cos vroom on sales pitch

Author | Source: The Economic Times | Tuesday, Nov 22,2005 7:50 AM

Bike cos vroom on sales pitch

Motorcycle makers are on a song. For the first time in Indian automobile history, the industry's incremental growth will cross one million in the current financial year.

During the year ending March '06, motorcycle makers aim to sell over 6m mobikes against less than 5m last year. What's more, they don't foresee any slack in demand growth despite a rapidly rising base.

For the last four years, the industry's incremental sales volume has been hovering between 5 lakh and 7 lakh units. “The motorcycle growth is being lead by smaller towns and rural areas, where still only 9% households own a two-wheeler.

In urban areas the market has saturated with people either migrating to cars or upgrading to premium motorcycles,” said S Sridhar, vice-president marketing, Bajaj Auto. In Delhi, there are close to 3m two-wheelers against 2.7m households.

The Pune-based two-wheeler major is expected to be the biggest beneficiary of the industry growth. The company is projected to end the current fiscal year with sales of close to 2m motorcycles (1.45m).

It's ditto with market leader Hero Honda that is confident of crossing a new sales milestone of 3m during '05-06. “We are expecting to sell more than three million bikes this year, as we are aiming to not only maintain our market share but also try increase it a little,” says Hero Honda's marketing head, P S Sunder.

Motorcycle makers are projecting the motorcycles market to grow in the range of 20-25% in volume terms in the current year. “Rural demand seems robust and we are increasingly expanding our sales and distribution reach in the hinterland.

Simultaneously we are making it easier for rural folks own a motorcycle by providing vehicle finance,” said Mr Sridhar.

The story is similar with Hero Honda, which owns one of the most extensive sales and distribution network in the two-wheeler industry. In the first seven months of current fiscal, the industry grew by around 22% with domestic sales crossing 3.3m.

The second half of the year (October-March) is always better than the first half and accounts for as much as 60% of annual vehicle sales. There's no reason why it will be different in the current fiscal.

Tags: e4m

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