Demand for two-wheelers in India declines for first time in more than three years

August results show that the Indian two-wheeler industry suffered a decline in sales for the first time in more than three years, mirroring the prevalent slowdown in the country’s economy. Manufacturers say that the 1.2 million scooters and motorcycles sold in August was 5.5% lower than the 1.3 million sold in the same month of 2011. Major two-wheeler companies, including Hero MotoCorp., Bajaj Auto and TVS, reported sharp decline in sales. Only two manufacturers, Honda Motorcyle and Suzuki, enjoyed increased sales due mainly to their recently launched 100cc motorbikes.
Industry officials admitted they faced tough economic conditions due increasing petrol prices and high interest rates. The last time the two-wheeler industry suffered monthly decline in sales was in January 2009, when sales slipped 4% year-on-year. They noted that the poor monsoon weather also contributed to the decline in demand for the vehicles as it affected the purchasing power of people in rural areas, the primary market for two-wheelers. (September 6, 2012)