Hero MotoCorp reported a whopping 43% decline in India two-wheeler sales in November due to a sharp downturn in rural demand.
The company, which gets most of its customers from rural and semi-urban regions, sustained a sharp blow to both its motorcycle as well as scooter sales, with the latter taking a bigger beating.
The decline seen in Hero MotoCorp’s November sales is bigger than that of its rivals such as Bajaj Auto and TVS Motor.
Hero MotoCorp’s total domestic market sales fell to 3.29 lakh in November 2021 from 5.76 lakh during the same month of last year.
The decline of 43% in November is even greater than the 32% fall seen in domestic market sales in the preceding month of October. The company has blamed delayed harvesting of crops in rural India for the poor sales performance, and expressed confidence that it will make for much of the lost volumes in the coming weeks.
Meanwhile, exports increased to 20,531 units during November compared to 15,134 during the same month last year and were largely flat when compared with October.
The company had increased the prices of its two-wheelers three times since April to tide over the increasing prices of raw materials such as steel and chromium, which also hurt demand.
“Delay in harvesting due to the late withdrawal of monsoon in many parts of the country impacted the demand post festive season. With the economy gradually opening up coupled with several other positive indicators, such as encouraging farm activity, confident consumer index and marriage season, a swift revival in sales is expected in the fourth quarter,” the company said in its latest update.
It held out hope that things would look up in coming weeks due to lower commodity prices.
“..commodity prices showing some signs of softening aided with the reduction of excise duty on fuel, and increased spending on Capex programs by the government is likely to bring back the momentum in the two-wheeler industry,” said the world’s largest motorized two-wheeler maker.
The company also said its electric vehicles (EV) project is progressing as per plans, and that its Chittoor manufacturing facility in Andhra Pradesh is gearing up to produce the green products.
“The teams at Hero MotoCorp are focused on working across the entire EV eco-system such as battery technology and battery management systems, powertrain, telematics, analytics and diagnostics and charging infrastructure.”
Hero’s rivals such as TVS and Bajaj Auto, which get a large proportion of their sales from export markets and urban centers, were able to report less damaging declines during November, in the range of 15-20%.
Overall, November has been a painful month for automakers in India as the country grapples with the impact of COVID, errant rainfall patterns as well as an increase in prices of key commodities including fuel.