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    Scooter, Mobike output nears 70% of pre-lockdown levels


    According to several executives, three of the country’s top five two-wheeler makers — Hero MotoCorp, Bajaj Auto and TVS Motor — are reaching out to suppliers to ensure 60-70% of normal output for June. Total production for June could be 750,000-1 million units, depending on how well the supply chain works.

    A strong post-lockdown preference for personal mobility choices over public transport has meant brisk two-wheeler sales, and leading manufacturers have ramped up production to 60-70% of normal levels within a month of factories opening up.

    According to several executives, three of the country's top five two-wheeler makers - Hero MotoCorp, Bajaj Auto and TVS Motor – are reaching out to suppliers to ensure 60-70% of normal output for June. Total production for June can be in 7.5 lakh units to 1 million range, depending on how well the supply chain works.

    If the industry manages to touch a million, it will be almost 70% of pre-covid levels in February. Two-wheeler companies output was 1.6 million at the end of February 2020, according to SIAM data.

    Rakesh Sharma, ED, Bajaj Auto told ET, demand is normalizing at a rate faster than expected.
    “We expect that June should be almost back to 80% of a normal June with the second half of June at an almost 90% normal level. There is a large component of pent up demand that is driving current sales. We would need to assess the pattern carefully over the next month to understand where the new normal will establish itself,” Sharma said.
    Hero MotoCorp, the country’s largest two-wheeler maker, had said in a post-March earnings conference that retail sales are reaching closer to 70-80% of the normal level. It had said that earlier the company used to chase retail and now retail is chasing production, although the base is lower.

    Niranjan Gupta, CFO of Hero MotoCorp declined to give specific forecasts for the coming months but told ET people looking to buy two-wheelers seem to opt for it sooner to be able to maintain social distancing.

    “There is a clear uptick in the customer sentiment, with good conversion of enquiries for all products. We have been seeing robust retail demand. The numbers are improving week-on-week and we are seeing a positive trend.


    Almost 90% of retail outlets have opened across the country across two wheeler makers and as expected the strong off take in the rural and semi-urban areas have driven the revival where the stores had opened up sooner than major cities.

    Sharma said demand is stronger in rural and semi-urban regions, where retail stores had opened earlier and the uptick in metros is slower. Hero, which sees half of its sales come from the rural market, said over the past one year rural has done better than urban, and the trend will likely continue.

    All three plants of Bajaj Auto are operating and they are ready to meet the anticipated levels of demand, Sharma said. Hero too said that with multiple plants across India, the company can meet demand. TVS Motor Company declined to comment.

    Industry experts say while the pick up in June over May is encouraging, yet it will be too early to call it a revival. On low base the pick up will look bigger on numbers.

    The experience of several countries post lockdown show that demand for personal transport has picked up as people prefer to use their own personal over the public transport.

    The demand for personal transport can be gauged from the fact that few countries had witnessed stock of bicycles running out of stock and people queuing for hours to buy bicycles. Two-wheeler companies could benefit from the accessible price points.

    Nikunj Sanghi, one of the largest Hero MotoCorp dealers in Rajasthan said, the walk-ins and enquiries at the entry level are seeing a more than expected surge because of almost complete absence of public transport and also concern for personal safety.

    “The demand for two wheelers will probably be the first to return to normalcy. Most two wheeler makers have indicated 70 to 80% of pre Covid production and despatches. Our only hope is that we do not touch 70% of pre Covid inventory,” added Sanghi.

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