Indians Are Buying Less And Less Two-wheelers

13.24 lakh two-wheelers were registered in June 2019 as opposed to 13.94 lakh in June 2018

• Two-wheeler sales have also dropped by 6.4 per cent. 
• Delayed monsoon and exceeding inventory levels two big reasons behind this slowdown. 
• The industry and the FADA have suggested some measures to the government to turn around this downwards slide. 

The first half of 2019 has been turned out to be quite the opposite of what bike makers would’ve wanted. First, monthly sales have been on the negative side for the past few months. In fact, sales have dropped from 43 lakh units in Q1 of 2018-2019 to 40 lakh in Q1 2019-2020, a slump of 6.4 per cent. Now, the Federation of Automobile Dealers Associations (FADA) has released the monthly vehicle registration data of June ’19 and it’s not looking good either. According to this data, the total registration of two-wheelers in India has decreased by 5 per cent. 

One of the major concerns that FADA has over this low sales figure is that the two-wheeler industry has been stockpiling its inventories at an alarming level. Most bike dealers currently have stocks of around 60-65 days on average, whereas the FADA-approved limit is of just 21 days. The other reason for this slowdown is that banks are being cautious about lending out loans to people, which is affecting dealers as well as buyers and thus upsetting overall sales. 

Being an agriculture-dependant country, monsoons play a major role in boosting India’s overall economy. As the monsoons have been delayed this year, not only has the overall economy been negatively impacted, it’s affected two-wheeler sales as well. 

However, the industry and FADA have suggested the government some corrective measures such as partial or temporary reduction of GST, a scrappage policy and ease in approvement of loans, which could bring back the stability in auto sales. FADA President Ashish Kale remains cautiously optimistic about the future, and commented, “With a vehicle penetration of less than 30 cars per thousand, the growth story of Indian auto sales will continue for the next decade and beyond. Countries within Asia and having similar or lower economic growth as India, like Malaysia, Indonesia, Thailand, Philippines and Sri Lanka, all have a far higher vehicle penetration and their auto sales are still growing.”