28/05/2022

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Top 10 2W makers in India in Q1 FY22; CRISIL trims growth forecast, Auto News, ET Auto

The scooters segment is anticipated to stage a very good restoration this fiscal, supported by more quickly restoration in city incomes

New Delhi: Domestic two-wheeler sales surged in the 1st quarter of 2021-22 as opposed to the prior year’s comparable quarter. However, CRISIL Rankings has trimmed its expansion estimate for two-wheelers this fiscal to ten%-12% against an previously estimate of eighteen%-20%, owing to deeper and wider penetration of the 2nd wave of the Covid-19 pandemic into the hinterland, short-term closures of dealerships and bigger channel inventory.

Gautam Shahi, director, CRISIL Rankings, said, “Though forecasts of usual monsoons in the impending period bode nicely for the rural segment, bigger level of Covid-19 infections in rural areas will impression revenue levels and constrain offtake for most of the 1st fifty percent of fiscal 2022. In addition, as opposed to through the 1st Covid wave, channel inventory for the industry was bigger at forty-forty five times in April 2021 as opposed to 20-twenty five times in April 2020 because of to BS-VI transition. Hence, the benefit of channel filling will not be accessible this fiscal, as the impression of the Covid wave abates from Q2 of the recent fiscal, ensuing in decreased expansion.”

The benefit of channel filling will not be accessible this fiscal, as the impression of the Covid wave abates from Q2 of the recent fiscal, ensuing in decreased expansionGautam Shahi, director, CRISIL Rankings

In accordance to the Culture of Indian Vehicle Producers (SIAM), the domestic two-wheeler wholesales in 1st quarter of 2021-22 witnessed a double digit expansion of 85% at two,403,591 models as against one,294,509 models in the Q1 of fiscal 2020-21.However, the sales figures are a lot decreased than the pre-Covid volumes of Q1 2019-20 at 5,013,067 models. Rajesh Menon, director basic, SIAM said, “Sales of 24.04 lakh models for the two-wheeler segment, ended up most affordable in the earlier 12 many years, but for Q1 of FY21.”

Two Wheelers- Domestic Income

Soon after the zero sales of April 2020 with the nationwide lockdown because of to the Covid 1st wave, April and Could 2021 sales also ended up marred by the 2nd wave since of the lockdown in several states. This influenced manufacturing schedules and dealership operations.

What created the 2nd wave far more devastating than the 1st just one was its prevalent impression on the rural financial system and market. Analysts predict that the big credit card debt and low revenue in the countryside will keep again economic restoration and dent private personal savings and investments for more time than predicted.

In the 1st quarter of the recent calendar year, SIAM reported one,740,198 motorcycle sales and 592,445 scooter sales in the domestic market as against April-June 2020 when sales nosedived to 901,743 models of bikes and 339,008 models of scooters. In April-June 2019, the industry recorded three,330,868 bikes and one,514,202 scooter sales.

Income of 24.04 lakh models for the two-wheeler segment, ended up most affordable in the earlier 12 many years, but for Q1 of FY21Rajesh Menon, director basic, SIAM

Rohan Kanwar Gupta, vice president and sector head, corporate rankings, ICRA, said, “The in depth localised lockdown actions, executed because of to the 2nd wave involving April and June 2021, ended up almost akin to the nationwide lockdown very last calendar year. Quite a few two- wheeler OEMs sophisticated their shutdown servicing schedules through these months, which hit wholesale volumes appreciably in April and Could 2021.”“This mirrored in a sharp sequential fall in two wheeler retail sales in the mini festive and wedding ceremony period in April-Could 2021. The inventory at dealerships, at 30 times+ at Could-stop, was also rather superior, which could imply only a gradual restoration in wholesale volumes, until the stocking starts for the forthcoming festive period,” Gupta additional.

Q1 FY22 market share

During the 1st quarter of FY21 (April-June 2020), the country’s greatest two-wheeler maker Hero MotoCorp obtained a market share of about 5% to cross the forty% mark for the 1st time in almost five many years (earlier 19 quarters). However, the automaker ended the 1st quarter of the recent economic calendar year (April-June 2021) just under the mark at 39.two%.

The Pawan Munjal-led business marketed 8,79,144 bikes and 61,453 scooters in the domestic market in Q1 FY22 as as opposed to 5,00,605 bikes and 39,132 scooters in Q1 FY21.

Two Wheelers: Q1 FY 2021-22 Industry Share

Two wheelers: Q1 FY 2020-21 Industry Share

Honda Bike and Scooter India (HMSI) obtained marginally to history 20.5% market share in Q1 FY22 from 19.8% in Q1 FY21. Before, the business had clocked 27% share in Q1 FY20.

The country’s greatest scooter company saw a expansion of fifty seven% in its domestic scooter sales at two,sixty seven,479 models through the 1st quarter of this fiscal calendar year as against one,sixty nine,995 models in the corresponding quarter prior calendar year.

For the very last economic calendar year, the business recorded twenty five.58% market share, which is a sharp reduction from a peak of almost 29% in FY18 and 27% in FY20.

Interestingly, Suzuki Bike India jumped up to the fifth place in the top 5 two wheeler makers listing this quarter from the placement of selection 7 in the 1st quarter of very last fiscal calendar year. The business earned four.8% market share in Q1 FY22 as against one.9% in the corresponding quarter very last calendar year. During the April-June 2021 quarter, Suzuki marketed one,13,224 scooters and three,642 bikes in the domestic market.

Bajaj Car and premium bike maker Royal Enfield maintained their positions at 14% and four% respectively, with no considerable adjust in their market share. Whilst the Chennai-primarily based TVS Motor missing almost one% market share as as opposed to Q1 FY21.

India Yamaha Motors market share dropped from three.two% in April-June 2020 to two.9% in the very same interval this calendar year.

Quality bikes, right after the earlier three fiscals of quantity decline, are anticipated to grow at 12%-fifteen%, presented the bigger selection of new launches and improved target of two-wheeler makers on ‘premiumisation’CRISIL

In the 110cc-125cc motorcycle segment, HMSI (CB Shine) took a guide with one,65,951 device sales through the April-June 2021 quarter as against the maximum of Hero MotoCorp (Glamour, Splendor) that clocked one,29,530 sales in April-June 2020 quarter.

The desire for 150cc-200cc premium commuter bikes witnessed a sharp improve of 189% with domestic wholesales in this class clocking one,sixty nine,947 models in Q1 FY22 as as opposed to 58,686 models in Q1 FY21. Whilst HMSI sells Hornet styles in the solution segment, TVS sells Apache model, and Bajaj presents Avenger, Husqvarna, KTM, Pulsar bikes. Hero MotoCorp’s Xpluse two hundred and Xtreme in this class garnered 8,455 models in this quarter against one,066 models in the corresponding quarter prior calendar year.

Outlook for FY22

In accordance to CRISIL, motorcycle volumes will see bigger moderation as 70-75% of these are marketed in rural areas, as opposed to scooters’ which is predominantly an city solution. Amongst the domestic two wheeler segments, expansion of rural-targeted govt and financial system bikes will remain constrained at 9%-eleven% this fiscal.

And the premium bikes, right after the earlier three fiscals of quantity decline, are anticipated to grow at 12%-fifteen%, presented the bigger selection of new launches and improved target of two-wheeler makers on ‘premiumisation’.

“The scooters segment is anticipated to stage a very good restoration this fiscal, registering quantity expansion of fifteen%-17%, albeit on a rather low foundation, supported by more quickly restoration in city incomes, continuing preference for private mobility, and the graded opening up of places of work and educational institutes, as vaccination travel gathers speed. This expansion, even though, is on the again of three consecutive many years of quantity decline.” CRISIL said.

Sushant Sarode, associate director, CRISIL Rankings, said, “Credit high-quality of two-wheeler makers will remain resilient looking at powerful equilibrium sheets, limited credit card debt, productive functioning cash management, strong liquidity (around INR forty,000 crores), and limited will need to incorporate far more capability, presented low capability utilisation around previously two fiscals.

Rankings agency ICRA expects a 12%-14% YoY expansion in two-wheeler volumes in FY22, amid an evolving Covid-19 predicament. Whilst the in general usage and financial investment desire may well take some time to recover right after the devastating 2nd wave, India’s rural financial system is anticipated to supply some assistance. Anticipations of a balanced rabi manufacturing, timely arrival of the monsoons, a hike in least assistance price ranges for kharif crops and other revenue assistance techniques by the Authorities are very likely to aid revive rural desire sentiments and assistance the two-wheeler offtake in the festive period.

In accordance to ICRA, presented the superior working leverage of the industry, subdued desire and ongoing hardening in uncooked-content costs are anticipated to maintain the working margins constrained for the two wheeler OEMs in the recent fiscal. However, these will very likely be around-about the FY2021 levels (13.5%-14%), supported by price escalations, a depreciating rupee and continuing price tag rationalisation initiatives. The RoCE of two-wheeler OEMs would also continue to remain at balanced levels, ranging involving 22%-24%.

Rohan Gupta of ICRA said, “In line with ICRA’s Secure outlook on the industry, the credit history profile of two wheelers OEMs is anticipated to remain balanced, supported by powerful equilibrium sheets, limited credit card debt and balanced hard cash and liquid investments. Whilst the capex would very likely be bigger than the FY2021 levels, important growth plans are anticipated to be deferred until a significant desire restoration. However, the OEMs will continue to spend in new solution progress and community growth in each domestic and abroad arenas.”

The analysts see decline in revenues up to 20%, whilst slump in sales could be as a lot as 30%-35% sequentially on account of lockdowns and offer-chain constraints.