Colombia. In ten months, 2-Wheeler sales dropped 19%

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Colombian Motorcycles
Photo by Zakaria Zayane on Unsplash

Colombian Motorcycles market is recovering after the deep lost reported in the mid of the year due to the covid 19 spread. With the +8% scored in October, the first ten months total sales have been 408.943, down 19.3%. Bajaj Auto is step in top of the list

Economic Environment

Following an unprecedented GDP drop in Q2, available data suggests that recovering activity hit a roadblock in Q3, as repeated extensions of the nationwide quarantine until end-August pummeled domestic activity.

After three consecutive months of moderation, the contraction in industrial output sharpened again in August amid reduced manufacturing of automotive parts and travel accessories.

Moreover, in the same month, retail sales declined at a much faster pace than in July, which, coupled with a still-elevated unemployment rate in Q3, hints that household consumption remained downbeat in the quarter.

That said, looking at Q4, the recovery seems to be gaining some steam again. Consumer confidence improved for the fifth consecutive month in October, while the manufacturing PMI climbed to a three-month high in the same month on the back of quickening output and a rebound in new orders.

2020 Motorcycles Market Data & Outlook

Colombian two-wheeler industry was really in a good shape and following the last two years growth, the start of 2020 had been very positive with sales increased 10.4% and 12.3% respectively in January and February.

Unfortunately, the arrival of Covid19 have forced the government to shut down industrial and commercial activities during March and the industry has reported the first decline, anticipating a very harsh year. In March sales have been 38.791 (-22.5%) ending the first quarter with 148.161, flat from the correspondent period last year, before to fell down sharply in the Q2 hit by lockdown ending the first half down 29.8%.

In Q3 sales rebound progressively however ending the period with a 5.6%lost compared with the correspondent quarter in the 2019. In October the market was up 8%.

In the first ten months of the 2020, total sales have been 408.943, down 19.3%.

The Indian Bajaj Auto keeps leading the market with 87.090 sales (-19.1%)followed By Yamaha with 85.012 (-25.2%) and Honda with 64.554 (-8.6%).

Market Outlook unchanged and not positive

In the Beyond Covid19 project, we are revising on monthly basis and sharing with our Clients the 2020-2025 motorcycles market outlook. Demand for a more individual mobility and the increased offer of more performing electric scooter is speeding up the industry trend.

However, in Colombia as in the entire Latam region, the Covid19 spread is still out of control and the effects on the economy, consumer demand and – finally -on our industry will be negative again in the next future.

Considering the June results, our Research Team did not changed the outlook, with full year 2020 sales projection steady at 515.000 units.

Colombian motorcycles industry heritage

In the last decade the Colombian motorcycle industry was completely transformed becoming not just a lifestyle sector, as in the past, but a key factor in the private mobility, thanks to the expansion of product offer, the fall of prices, the increased care for safety and the youngest generation love.

So today there is a wider range of consumers approaching the purchase of a motorcycle to transport themselves to the university, to their workplaces or working for the new fast developing category of delivery-men, people who use motorcycles to fast deliver everything, from food to goods.

Today in Colombia over 50% of vehicles park is on two-wheeler and in average there is a motorcycles each 5 people living in the country. These data allow to explain why motorcycles are actually an important tool for Colombians, for transportation, for lifestyle and for working as well.

To achieve these outstanding performance a brilliant job has been done by the government, which has progressively changed rules to guide the sector evolution, and by the manufacturers, which have made a tremendous effort to create local facilities and produce high quality-good priced vehicles and related products such as accessories, equipment and special clothing.

In Colombia there are six motorcycle manufacturers (the oldest is active since 1942) which operate assembling in partnership with top international firms, like Honda, Kawasaki, KTM, Kymco, Victory, Yamaha, Suzuki, Hero producing both for domestic market and export.

The Colombian motorcycles market is the fourth largest in Latin America after Brazil, Mexico and Argentina.

The market grew up consistently in the decade ended in 2014, when total sales hit the highest level 694.800 units.

The country has been chosen as production hub for the Latin America by several Asian manufacturers and is not a surprise to find as market leader the Indian Bajaj Auto.