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Domestic motor-cycle sales bounce back after a two-year lull

Last Updated: Sunday, October 25, 2009 - 09:56

Mumbai: Domestic motor-cycle sales have
witnessed a strong bounce-back after two torrid years, a
report by a leading credit rating and research agency, said.

Domestic motor-cycles sales registered strong 14.9 percent growth in the first half of this fiscal (H1 FY 10) over the corresponding period in the last fiscal, Credit Analysis & Research Ltd (CARE) said in its report.

Domestic sales during the first-half of this fiscal stood at 35.2 lakh units against 30.6 lakh units in H1 FY 09. Sales had witnessed a sharp drop of 11.9 percent in FY 08 and registered only a modest growth of 1.2 per cent in FY 09.

Motor-cycles with engine capacity from 75 cc to 124
cc, the largest segment accounting for nearly 72.73 percent
share, registered a 16 per cent growth in sales while the 125-
249 cc category, accounting for nearly 27 percent of sales,
registered a comparatively lower growth rate of 11.8 percent.

Though motor-cycles on and above 250 cc engine
capacity witnessed a very high growth rate of 30.5 percent,
merely 25,512 motorcycles in this category were sold in H1 FY
10 as compared to 19,548 motorcycles in H1 FY 09, the report
said.

According to the report, around 60-65 percent of the
total domestic sales in H1 FY 10 came from rural areas.

The cost-conscious rural populace tend to purchase
fuel-efficient and lower-priced motor-cycles with engine
capacity up to 124 cc.

The last few months saw motor-cycle sales coming
primarily from rural areas while urban households were reeling
under the pressure of the global financial meltdown.

Thus, the entry level 75 to 124 cc motorcycle segment,
typically preferred by rural households, witnessed relatively
higher growth than the 125 to 249 cc motorcycles, said Revati
Kasture, Head, CARE Research.

Many rural households, which largely remained
insulated from the recent financial crisis, took advantage of
the reduction in excise duties as well as lower petrol prices
and interest costs and bought motor-cycles for themselves, she
said.

In rural area, merely 15 percent of the young
population, who can afford a two-wheeler, actually owns the
vehicle, while 57 percent of the young urban population, who
can afford a two-wheeler already owns one. It would provide
humungous opportunity for the motor-cycle industry from rural
India, the report observed.

With the cost-conscious rural India foreseen as the
growth-driver, the entry level segment would continue to
remain significant for the industry in the next 45 years, Care
Ratings` Managing Director and Chief Executive, D R Dogra,
said.

Bureau Report



First Published: Sunday, October 25, 2009 - 09:56

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