In previous months, car makers had announced price hikes on either selected models or their entire product range due to high input cost and big time rupee devaluation against the dollar. Now, the same strategy has been adopted by two-wheeler companies that are currently operating in India. Notably, just ahead of the festive season, leading two-wheeler makers Hero MotoCorp, Bajaj Auto and India Yamaha Motors have announced a price hike of Rs. 160 to Rs. 5000 on their respective two-wheeler products. This price hike has been attributed to the volatile rupee and soaring input costs. This means that customers have to shell out more money to purchase their favourite bikes this festive season.
Even as leading two-wheeler makers have gone ahead to put more financial strain on customers' pockets, the Japanese two wheeler major Honda Motorcycle & Scooter India is yet to decide on the price increase on its product range. Notably, the Japanese two-wheeler already has a strong foothold in the Indian automobile market and now plans to steadily increase its share in the two-wheeler segment through some aggressive business strategies.
Though the unexpected announcement about the price hike has been made by major two-wheeler makers, the actual rise is going to vary from company to company and model to model. In other words, this price hike is both company specific as well as model specific. As per the available information, Bajaj Auto is going to impose a hike ranging between Rs. 500 and Rs. Rs. 5,000. Hero MotoCorp is seemingly content with an increase in prices by Rs. 500 to Rs. 1,000 while India Yamaha Motors has decided to go with a marginal price hike of Rs. 160 to Rs. 400. Notably, India Yamaha Motors had already announced price rise just three months back by a similar margin.
These price hike announcements by two-wheeler companies in India have come after they recorded healthy sales in September 2013. Notably, Hero MotoCorp, Honda Motorcycle & Scooter India and India Yamaha all, reportedly, posted double digit growth in sales. Bajaj Auto has also posted good retail sales in the country in the previous month. Many industry experts believe that the growth rate of major two-wheeler companies, as reported, indicate that the demand scenario in the country is good for two-wheeler sales. In addition, with strong return to consumerism, two-wheeler companies think that prospective buyers will be able to absorb this price hike made just before the festive season. As per reports made available by various agencies, the two wheeler segment has grown by 15 per cent in September after posting flat sales during the time period between April 2013 and August 2013.
Rajiv Bajaj, MD, Bajaj Auto said that the price hike is less likely to impact the demand of two-wheelers in the country. However, it will do good to cushion under pressure margins partially that most of the two-wheeler makers have absorbed in the first half of 2013. Atul Gupta, Executive Vice President at Suzuki Motorcycle India, even said that no co-relation between increasing prices and demand can be established in the current two wheeler space and prevailing circumstances in the Indian market.
