November 2016 saw the biggest drop in sales for the Indian two-wheeler industry. 12,43,231 units of two-wheelers were sold in November as compared to 17,97,562 in October 2016 – that’s a drop of nearly 30 per cent.
This massive drop in sales is a result of the end of festive season and the demonetisation move by the government. The major impact of demonitisation would have been felt in rural areas where majority of the purchases take place via cash transactions. Hero MotoCorp saw close to 28 per cent decrease in sales. It sold 4.68 lakh units in November as against 6.50 lakh units in October. It’s the same story with Honda - sales went down by 36 per cent to 2.99 lakh units as compared to 4.70 lakh in October.
The third largest two-wheeler manufacturer, TVS, sold 1.91 lakh units in November. Its sales in October stood at 2.72 lakh. Bajaj was at the receiving end too, due to demonetisation. The sales for the Pune-based manufacturer dropped by 33 per cent to 1.39 lakh from 2.01 lakh in October. Out of all the top five manufacturers, Yamaha saw the highest drop in sales at 40 per cent. The Japanese manufacturer sold 51,106 units in November as against 86,430 units in October. Interestingly, Royal Enfield saw a mere four per cent drop in sales – looks like demonetisation doesn’t affect the RE customer much!
We’re expecting December to be a disappointment month for the two-wheeler industry as the effects of demonetisation combine with the usual averseness to making vehicular purchases at the end of the year. 2017 should be better, as January is traditionally a month when sales pick up, along with price hikes.