Hero MotoCorp Only Listed Two-Wheeler Firm Whose Sales Fell In All 12 Months Of 2019
Eicher Motors’ Royal Enfield was the second-worst performer in 2019 as its motorcycle sales fell in 11 out of the 12 months.
Hero MotoCorp Ltd. saw its sales fall in all 12 months of calendar year 2019 as weak rural demand, coupled with higher ownership cost and increased competition, dented sales of India’s largest two-wheeler maker.
The company is the only listed two-wheeler maker to clock a decline in sales in the last 12 consecutive months. Two-wheeler sales of Eicher Motors Ltd.—the maker of Royal Enfield motorcycles and the second-worst performer in 2019—fell in 11 out of 12 months.
A slowdown in rural India and an increase in ownership cost has hurt the maker of Splendor motorcycles. The slump in rural economy has adversely impacted the firm as it sells over 60 percent of its total volumes in rural India, Ashwin Patil, auto analyst at LKP Securities, told BloombergQuint.
Other factors, such as a mandatory third-party motor insurance and the transition to Bharat Stage-VI emission norms, have caused prices to increase by around 15 percent, putting off price-sensitive Indian buyers, he said.
New product launches by competitors and Hero MotoCorp’s lack of products has also hurt its market share in the fast-growing scooter and premium motorcycle segments.
Also Read: Royal Enfield’s Problem Is Bigger Than The Auto Slowdown
“Hero’s market share in scooters has come down to 6 percent in FY20 from 19 percent in FY14. On the contrary, the share of scooters in the two-wheeler industry has risen from 15 percent in FY09 to 32 percent in FY20,” Aditya Jhawar, auto analyst at Investec Capital Services India Pvt. Ltd., wrote in a report.
Also Read: Bajaj Auto Extends Its Lead Over Hero MotoCorp
“Hero, for a long time, did not have a presence in the 125-cc scooter segment before launching the Maestro 125cc in May last year,” Jhawar said. “Similarly, in premium bikes—which constitute 15 percent of the two-wheeler industry—Hero’s market share has come down to a mere 1 percent in FY20 from 22 percent in FY09.”
(Corrects earlier version to clarify that only listed two-wheeler makers were included in the comparison.)