Led by market leader Hero MotoCorp, Indian companies expanded their market share by 4.5-5 percentage points between April and August, or the first five months of the ongoing fiscal year.
A deep rural reach and a large portfolio of entry-level vehicles have helped the Indian brands to do better than the Japanese, who are weak on both these facets in the Indian market.
The share of Indian two-wheeler makers — Hero MotoCorp, Bajaj Auto, TVS Motor and Royal Enfield — cumulatively has increased to 69.3% from 64.8%. The share of Japanese bike makers dropped to about 30% from almost 35% in the same period.
In the scooter segment, Hero MotoCorp and TVS Motor have seen their market share grow by 2-3 percentage points, at the cost of Honda Motorcycle and Suzuki Motorcycle.
In the entry motorcycle space, Hero MotoCorp has been the biggest gainer (+5%), whereas in the 125-150 cc segment, the share of Bajaj Auto has expanded a whopping 12 percentage points.
Honda Motorcycle has lost share in all segments of motorcycle, barring the 150-200 cc space where it has more than tripled the market share to 30%.
“Our proactive planning during the lockdown phase has enabled us to hit the ground sprinting once businesses reopened,” said Naveen Chauhan, the head of sales & after-sales at Hero MotoCorp. “In the first five months of this fiscal, we have increased our domestic market share significantly. Our YTD (year-to-date) market share for FY21 till the end of August has risen to over 39% in this highly disruptive period.”
Amid Covid-19, the rural markets and entry segments have seen a better traction. A bumper crop and cash transfers by the government have kept the rural economy partly insulated from the pandemic, while plentiful rains this monsoon have boosted the sentiment. Meanwhile, India’s automobile sector is witnessing downtrading, with customers preferring cheaper models amid the uncertainties over Covid-19.
On the entry-level segment, Indian companies barring Royal Enfield have multiple offerings and almost all of them get sizeable sales from the rural areas, which account for 40-50% of total sales.
The share of 75cc-125cc motorcycles is almost half of the overall two-wheeler market, where Japanese motorcycle makers, largely Honda, have a 15% share.
Hero MotoCorp management had told investors in a recent conference call that ramping up supply was a bigger concern than demand. Retail sales have been improving month on month and first-time buyers are the biggest driver of sales, and it is largely need-based buying currently as against discretionary purchase.