Indian Motorcycles Market reported in the 2020 the deepest lost ever with 14.8 millions sales (-23.3%). However, Q4 sales recovery was strong ending with December up a huge 32%. Rural areas resilience push up Indian manufacturers market share.
Data reported for India regards wholesales and not – as for all the other countries – registrations. The perimeter of data covered includes motorcycles, moped, scooter, both on ICE and electric engines. In addition, data includes the commercial three wheeler, very popular in the country.
While the urban markets are still grappling with a still high number of COVID-19 cases, the comparatively less impacted rural and semi-urban markets have enabled a sequential improvement in sales, resulting in a general recovery for the entire industry.
However, two and three wheeler market reported in the 2020 the widest contraction ever, following the 13.2% sales lost in 2019. The industry fell heavy in Q1 (-24.5%) and Q2 (-72.2%), before finding a recovery in the Q3, when sales slipped down only 3.9%.
Finally in the Q4 the market grew up in double digit, with October +16.9% Y.o.Y., November +13.6% and finally December +32.5%.
However annual sales have been 14.8 millions, down an impressive 23.3%.
While in the 2021 the market will score aa report, we the industry will not be back at the 208 record level before 5 years.
Looking at the competitive arena, it seems that some market dynamics changed amidst the COVID-19 pandemic effect, considering Japanese automakers have ceded their share to Indian counterparts. The changes are probably correlated to the growth of weight of rural areas, more resilient during the crisis, where Indian brands dominate.
Hero MotoCorp is the second world’s largest two-wheeler manufacturer thanks to the huge share performed in India. During the current calendar year they further strengthened the competitive position increasing market share to 37%, while the archrival and former partner, Honda Motorcycle and Scooter India (HMSI) lost its India share at 23.8%.
All others top manufacturers have lost in the year: Bajaj Auto (-22.4%), TVS Motor (-20.6%), Royal Enfield (-33.3%), Suzuki (-30.0%) and Yamaha (-18.6%) witnessing marginal differences in their market share as compared to last year.
Overall the share of the homegrown two-wheeler manufacturers increased to 68.4% in this calendar year so far against 64.5% last year.
Meanwhile, the share of Japanese companies declined to 30.7% from 35% last year.
Deep penetration in rural markets and a large portfolio of entry-level offerings have helped Indian companies to gain market share at the expense of the Japanese firms. It remains to be seen if this is just a Corona virus-induced phenomenon or going to continue in the long run. We believe that since 2021, the ability to economically approach the required development of electric two wheeler will make the difference.
In the 2020 the more resilient segment was the “entry level” both between motorcycles (led by Hero) and scooter (led by Honda) with high displacement sales dropped heavily and all premium brands (Harley-Davidson, Ducati, Triumph, BMW) reporting with lost well above the market. Only KTM was resilient, thanks to the partnership with Bajaj and to the introduction of the brand Husqvarna, able to deliver around 700 units per month.
The entry-level motorcycle space is dominated by Hero MotoCorp and this is an high risk for the market leader, as the transition to electrified models will bring higher production cost and higher price, with potential lost of sales.