MUMBAI: Two wheeler majors, Hero Honda, Bajaj Auto (BAL) and TVS Motors, who between them constitute about 86% of the domestic two-wheeler market, saw a sluggish growth in sales in December ’05.
Hero Honda’s sales grew 6% to 2.5 lakh units in December ’05, while Bajaj Auto grew marginally by 1% to 1.5 lakh units.
TVS saw a 11% growth in December ’05 at 1.1 lakh units. The strongest performance was reported in the motorcycle segment. While Hero Honda sold 2.5 lakh motorcycles, BAL sold 1.5 lakh motorcycles and TVS 68,724 motorcycles in December ’05. Analysts indicate the growth in sales to new model launches by the three majors as they scramble to beat sales targets at end of the fiscal. Demand for two-wheelers is likely to see a slowdown in the next quarter, analysts said. The cumulative tally for the period April-December ’05 for Hero Honda stands at 22.3 lakh bikes, clocking a growth of 15% over the year ’04. Bajaj Auto recorded a 26% growth at 14.8 lakh units for the last nine months.
Meanwhile, two wheeler manufacturers are increasing capacity to meet the increased demand. BAL is raising its production capacity to 2 lakh vehicles per month from the current 1.5 lakh per month. TVS Motor is raising capacity from 1 lakh units to 1.6 lakh units per month and Hero Honda, which is lining up a 150-cc model, is hiking capacity at its existing plant from around 2 lakh vehicles a month to 3 lakh units a month.
India’s annual two-wheeler production is slated to touch the 10m units mark by ’10 and industry sources insist it could even surpass China by then. With the 125 cc motorcycle model priced close to the 100 cc, demand may shift in favour of the higher size engine category. This will force two-wheeler manufacturers to bring down prices of 100 cc motorcycles in the next few months, currently selling at prices close to the 125 cc.
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