Torrential downpour, floods wash away 2W sale in July, 2023
According to Hero Motocorp, “The incessant rains and the floods caused crop damage in several states. It resulted in sharp decline in customer footfalls at the dealerships.”
Torrential downpour in the current monsoon season and persistent sluggishness in rural demand has washed away domestic two wheeler sale in the country in the month of July, 2023. Two of the biggest two wheeler (2W) manufacturing companies of the country, Hero MotoCorp and Bajaj Auto reported yearly fall in 2W sales volume in July, 2023.
India’s largest two-wheeler company, Hero MotoCorp, saw July, 2023 2W sales volume plunge by 14 per cent on year-on-year (YoY) basis to 3.71 lakh units from 4.30 lakh units in July, 2022.
Bajaj Auto, on the other hand, saw July, 2023, 2W sales plunge 14 per cent YoY to 1.41 lakh units from 1.64 lakh units in July, 2022.
Hero MotoCorp has attributed the fall in sales to incessant rain in July, 2023 along with floods in certain parts of the country. The incessant rains and the floods caused crop damage in several states. It resulted in sharp decline in customer footfalls at the dealerships.
But, going forward, the New Delhi based 2W company is hopeful of revival in sales volume owing to upcoming festive season along with attractive finance schemes rolled out by different two wheeler companies in India.
Over the past month, country has been devastated by torrential downpour and resultant floods in states like Kerela, Gujarat, Goa and Maharashtra.
According to the India Meteorological Department (IMD), India received 15 per cent higher than the normal rainfall in July, 2023. In the ongoing monsoon season, the country has received total of 312 mm rainfall against the average of 271.9 mm.
Talking about sluggishness in rural demand, according to the Centre for Monitoring Indian Economy (CMIE), unemployment rate in rural India touched two year high of 8.73 per cent in June, 2023. Albeit, there was some consolidation in July, 2023, but still rural India’s unemployment rate hovered around 8 per cent in July, 2023. If we talk about year ago period, rural India’s unemployment rate was 6.8 per cent in July, 2022. So, rural India is currently facing high unemployment rate.
All these factors combined can be attributed to fall in domestic 2W sale in country in the said month. Although , other two wheeler automobile companies reported improvement in sales volume on yearly basis as is evident in table below:
July 2023 2W sale in India:
Source: Company filings
Going forward, if state of the economy improves, then, the two wheeler companies can expect some revival in sales. Plus, upcoming festive season is expected to push sales as well.