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Honda Motorcycle Scooter India posts huge decline – Slips to 3rd for 1st time in 7 yrs

The two wheeler sales in general have been under-performing in India for quite sometime now. Most of the key players ended FY 2018-19 with a decline in sales volumes and Honda Motorcycle and Scooter India (HMSI) is no exception. The Japanese giant registered sales of 55,20,000 units last fiscal which is 6.45% less that what it managed in FY 2017-2018.

Looking at the year-on-year sales performance in March 2019, Honda took a massive hit. Sales slipped by a staggering 46.79% at 2,22,325 units last month compared to 4,17,380 units in March 2018. This is certainly one of the worst declines the two wheeler maker has experienced in India since its entry.

Honda Motorcycle and Scooter India last posted sales in the 2 lakh region back in 2011/12. It was back in March 2012 when Honda overtook Bajaj and cemented its position as the 2nd largest two wheeler maker in India. Sales posted in March 2012 were at 2.12 lakh units.

Honda, Yamaha numbers credit Auto Punditz.

We are not sure about the reasons behind the shock YoY decline which has relegated HMSI to third spot in the Indian two wheeler market for the month of March 2019 behind Hero Motocorp and TVS. In fact, the difference in sales between HMSI and fourth placed Bajaj was just around 2,000 units.

Like other two wheeler OEMs in India (with the exception of Bajaj Auto), Honda has been struggling with rising levels of inventory at the dealership level in the last quarter of FY19. In a bid to reduce the inventory buildup and improve liquidity of its dealer partners, the Japanese automaker moderated its production and dispatch operations.

With no sign of market recovery on the horizon, Honda is expected to step into the new fiscal with a decline in year-on-year numbers in April as well but the question is, can the company reduce the magnitude of fall? Sales during the April to June period generally picks up owing to marriage season but this year, the elections could prove to be a deterring factor.

Lack of significant new product launches in the recent months could be one of the reasons for Honda’s poor show last fiscal. While the company continues to be the market leader in automatic scooter segment, its commuter motorcycle portfolio failed to fire in a market that is slowing down. Honda needs some interesting new offerings in this segment to plug the leak. It is working on Activa 6G.

It would be interesting to see if HMSI can regain its number two spot in the market in the coming months.

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