The second COVID wave has severely affected the
two-wheelers market, and as of April, reports from Motilal Oswal Financial
Services mention a 30-50% reduction in sales in April. This is significantly
seen in smaller cities where the number of COVID cases in April has been much
higher than in September of last year.
April is considered a festive and wedding month
and dealers usually invest in more inventory, expecting higher sales. In
Northern and Central India, April is a month of weddings and various festivals.
In all parts of rural India, the Rabi harvest happens in April too. Festivals
like Gudi Padwa and Navrathri also fall in April.
According to the report, dealers did see an increasing number of enquiries and
bookings at the
beginning of April. However, the cancellation rates became high after the COVID
cases started increasing.
Dealers from Maharashtra have reported clocking
just 50% of their expected sales on Gudi Padwa. The ongoing Panchayat elections
in Uttar Pradesh have also played a role in bringing down sales.
With the COVID cases increasing, people have
lesser savings and slow economic activity, and higher medical bills have also
resulted in minimal cash flow.
When it comes to the wholesale market, the
Financial Year 2021 wholesales went down by 12% and registrations for retail
sales went down by 32%. It is also to be noted that the OEMs have increased
their product prices by 5-8% in the last year to cover increasing commodity
prices and inflation. As a result, the two-wheelers market is going through
hyper-cost inflation of about 25%.