Two-wheeler sales jump upto 35%, return to pre-COVID level

Demand for two-wheelers remained strong in October 2020 as major two-wheeler manufacturers reported double-digit YoY increase sales. Manufacturers such as Hero MotoCorp, Honda Motorcycle & Scooter India (HMSI), TVS Motor Co. and India Yamaha Motor reported an increase in sales in the range of 10-35 per cent.

The two and three-wheelers industry is likely to see only one project getting commissioned in the ongoing financial year. Ather Energy will invest Rs 635 crore on its electric scooter and lithium ion battery manufacturing project in Chennai. This project will get commissioned in December 2020. The facility will have a capacity to manufacture 100,000 electric scooters per annum.

Profitability of two and three-wheelers industry declined in September quarter. Operating profit margin of the industry remained flat, while net profit margin of the industry contracted during the quarter. The industry sales revenues increased for the first time in the past six quarters.

A faster rise in total expenses with respect to total income impacted the profitability of the industry in September 2020 quarter. The total income increased by 5 percent in September quarter.

Operating profit of the industry increased by 6.10 percent in September on yearly basis. The two and three-wheeler industry profits contracted 86 percent in the June quarter of this fiscal. Festive purchases, preference for personal mobility and inventory push by manufacturers towards dealerships propelled two-wheeler sales during September and October 2020.