Honda Motorcycles and Scooters India (HMSI) post impressive growth in 2007 amidst its competitors whose sales have declined..
Two Wheeler sales have taken a hit in 2007. Industry watchers attribute this mainly due to the rising interest rates. The top three i.e. Hero Honda, Bajaj and TVS have all registered negative sales. Interestingly Honda Motorcycles and Scooters India (HMSI) has showed an impressive 43 % growth. So akin to Aesop's famous fable, has the Tortoise finally managed to pip the Hare(s)..??
>> So has the Tortoise finally managed to pip the Hare(s)..??
>> Is it also an indicator of a change in the preference of consumer to think beyond 100 C.C..??
How has HMSI achieved a positive growth figure when the whole industry was witnessing a decline..??
Mr Sanjay Gupta (Sr. Manager, marketing at HMSI), says
“New variants of our existing models plus better market penetration in semi urban and rural areas due to expansion in our network have helped us. For instance, our network is also growing fast. We already have a network of more than 400 outlets across metros, semi-urban markets and small towns and this will be in excess of 600 before this year end.”
Apart from increasing the number of dealers and introducing new(??) variants, one more factor might have contributed to HMSI's increase in sales. The 100 C.C motorcycle segment has been witnessing negative growth of late. And HMSI doesn't have a 100 motorcycle in it's portfolio. Not till now..
During the first quarter of 2007, the 100 cc segment saw a negative growth rate of 20% as against a 16% growth in the 125 cc and 150 cc segments.
- Even in the second quater, the entry-level (125cc and less) motorcycle segment saw a negative growth of 21% but, the premium segment (125cc and above) grew by over 13%.
Mr. R. Chandramouli, senior VP-Sales, TVS Motors has the following explaination for this trend..
“The commuter segment usually depends on auto loans. Around 80% of sales in that segment are through finance. Therefore it was hit badly by the high interest rates.
The premium segment is usually crowded with students whose parents pay upfront, therefore it wasn’t affected that much.”
Bike makers are waiting for the festive season. They hope that sales will pick up due to the festive/buying season and also that consumers will some time to adapt to the higher interest rates.
But is the decrease in sales of 100 C.C motorcycles merely due to rising interest rates or is it also an indicator of a change in the preference of consumer, who might have sarted to think beyond 100 C.C..??
News Source: Economic Times
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