Fuelled by demand in rural areas and a rising appetite for the premium segment, motorcycle sales outpaced scooter sales in FY19, a report by financial services firm Motilal Oswal has revealed. “For the first time in many years, motorcycle growth at 7.8 percent outpaced scooter sales, which declined 0.3 percent in FY19,” the report added.
“Growth of 7.8 percent in motorcycle sales was led by the economy segment, which grew ~23 percent for the second consecutive year, whereas the premium segment grew 8.8 percent,” the brokerage noted.
The decline was pronounced in the 110 cc segment—the top-selling segment for most two-wheeler makers—where the sales fell by nearly 10 percent, while the 125 cc category is estimated to have grown by 47 percent in FY19.
The growth in the premium segment was fuelled by non-Royal Enfield brands, with TVS Apache, Bajaj Pulsar and Honda XBlade leading the charge.
“Unlike previous years, the growth in the premium segment at 8.8 percent in FY19 was driven by growth in non-RE brands, which grew by 11.3 percent (led by Apache, Pulsar and Xblade). RE grew 14.8 percent during the same period”, the report adds.
Recovery in the rural market and competitive pricing by Bajaj Auto were among the primary reasons behind the rise of motorcycle sales.
“Rural recovery and price actions by Bajaj drove healthy growth in the economy segments, which grew ~23 percent in FY19 (+23 percent in FY18). While the premium segment grew ~9 percent (premium ex-RE grew ~12 percent), the executive segment was flat”, the report says.
Premium segment continues to show strong growth, with Yamaha’s popular bike R15 registering a 131.4 percent sales growth.
“Premium segment sales showed consecutive growth of 8.8 percent for the sixth year in FY19. RE’s domestic sales increased 0.5 percent. However, premium segment (exRE) sales grew 11.9 percent.
“Yamaha’s premium motorcycle sales increased by 24 percent, led by healthy growth in FZ (+12.7 percent) and R15 (+131.4 percent)”, the report says.
Nevertheless, Motilal Oswal backs four-wheeler makers as the impact of BS-VI is minimal and the stable competitive environment.
“We prefer 4Ws over 2Ws and CVs due to stronger volume growth in the segment. Also, it is the least impacted segment in BSVI and offers a stable competitive environment.
"Our top picks in autos are Maruti Suzuki India Ltd and Motherson Sumi Systems in large caps and Ashok Leyland and Exide Industries in midcaps", the report concludes.
First Published: Apr 26, 2019 11:58 AM IST
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