Two-wheeler sales in June painted a mixed picture for the auto industry. While Hero MotoCorp's monthly sales at 15% growth beat analysts' estimates, other listed two-wheeler makers—Bajaj Auto and TVS Motor —reported a relatively subdued 5% growth. Eicher Motors Ltd. reported a decline of 5% in Royal Enfield sales.
Sector watchers had expected flat-to-low single-digit growth for the Hero Moto. The outperformance came via the company's highest-ever dispatches for its electric scooter—the VIDA V1.
Analysts were expecting TVS Motor to report 9% sales growth. The company stated in an exchange filing that the challenges in container availability due to the prevailing conditions in the Red Sea led to a fall in growth in exports in June.
Bajaj Auto also reported 5% sales growth versus average analyst expectations of flat volume this month. While two-wheeler sales grew just 3%, the commercial vehicle segment was one of the key growth drivers—up 16% this month across the domestic and export markets.
Eicher Motors was the most disappointing among the two-wheelers, with a fall in growth of 5% in June. The commentary after June quarter results will be key, as this fiscal was expected to be ramped up to roughly 80,000 units per month but the current sales of roughly 73,000 units in June isn’t encouraging. Models with engine capacities up to 350 cc, which make up roughly 80% of the total volume for the Royal Enfield maker, have reported 10% fall in growth.
In Focus: Rural Recovery
The two-wheeler makers have been betting on a spurt in rural demand to boost their sales further. According to the Federation of Automobile Dealers Associations (FADA), the recent growth in the space signifies the revival of rural India. This market is seeing a consistent growth in the two-wheeler segment
Maruti Suzuki India reported 12% growth in sales in June compared to last year, which could be another hint of recovery in rural segment.
The company launched a 'Dream Series' of three of its entry-level models like Alto K10, Celerio and S-Presso, all priced at Rs 4.99 lakh. They have secured 21,000 bookings under this limited edition multi-brand models and have decided to continue this initiative in July as well.
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