Covid 2nd wave hits two-wheeler sales harder
THE second Covid wave has impacted the two-wheeler markets harder than the earlier one with sales declining by 30-50 per cent so far in April despite a mini festive season during the month, according to a report.
image for illustrative purpose
Mumbai: THE second Covid wave has impacted the two-wheeler markets harder than the earlier one with sales declining by 30-50 per cent so far in April despite a mini festive season during the month, according to a report.
Smaller cities are seeing the impact of the second wave (unlike the first wave), amid the cases reported in the second week of April surpassing the peak of September last year, brokerage firm Motilal Oswal Financial Services said in its report.
GudiPadwa, which is a major festival of Maharashtra, fell on April 13 while the 9-day fasting period Navrarati commenced from the same day last week, among other festivals. Festive periods like Navratri and Gudi-Padwa account for a fair share of annual vehicle sales across the country, as per the report. Noting that the month-to-date (MTD) saw significant decline in demand in two-wheeler retail sales, the report said that if demand fails to recover amid the mini festive season and wedding season, demand recovery may be deferred up to October, which is main festive season.
Dealers commenced April with high inventory owing to factors such as the year-end push and high sales expectations from the festive and wedding season (northern and central India) and also rural demand from the rabi harvest, it said. However, according to the report, sales were much lower from the festive season and the rabi harvest with expected two-wheeler demand recovery during this period is yet to play out and is much lower than normal.
According to Motilal Oswal, inventory at some of the major two-wheeler manufacturers was manageable at the start of the month, with a supporting number of inquiries and bookings. However, dealers saw a significant increase in cancellations with the rise in Covid cases.
Maharashtra dealers on GudiPadwa posted just 50 per cent of expected sales. UP retails were also impacted by the ongoing Panchayat elections, it stated. Stating that unlike the first wave, the second wave would see limited benefit from pent-up demand, the report said, as per dealers, after the first lockdown, sales were driven by pent-up demand on account of the wedding season along with rabi harvest as well as non-availability of public transport.
Demand was further supported by cash in the market as well as a very low number of cases. However, people have lesser savings amid the second wave as a consequence of a slow economic activity in the current fiscal coupled with minimal cash inflow from migrant relatives and high medical bills.
