As if the depressed passenger car sales was not enough, now speculation are that two-wheeler sales in the Indian auto market may as well fall due to soaring petrol prices. Notably, the petrol prices that has been revised several times since June 2013 are cited as the main reason. The impact of these repeated price hikes is being reflected by the dampened demand for two-wheelers like motorcycles and scooters. As it happens out to be, two-wheelers are the most affordable means of daily commuting for people living in rural areas and sections of the urban middle class. With ever increasing fuel prices, using a personal transport is getting costlier with every passing day. People are being impacted and so do auto companies who deal with two-wheelers. Notably, two-wheelers have a strong presence in the country. This is evident from the survey that shows that two-wheeler vehicles have a share of over 60 per cent in India's 16 million tonnes petrol sales, and 30 per cent is contributed by rural areas.
So far, petrol price has seen a revision of as many as 9-rounds of price increase. This amounts to an increase of 20 per cent in the last four months. Diesel price too have been increased by Rs. 0.5 a month, culminating to an increase of 25 per cent. This is certainly substantial and hence, the impact. The data keeper for the oil ministry Petroleum Planning & Analysis Cell (PPAC) has said, “Despite domestic sales of 1.13 million two-wheelers in July, the segment recorded a marginal de-growth of 0.1 per cent.” Rising fuel prices seem to have hit mass products like 100-125 cc motorcycles and 110 cc scooters the most as people are finding it hard to keep-up with expenses incurred while using personal two-wheelers for daily commuting.
In order to mitigate the impact of rising prices, auto companies are constantly trying to come up with products that offer better mileage. YS Guleria, Honda Motorcycle & Scooter India VP-marketing & sales, said, “While petrol prices have gone up by 13 per cent since January this year, our revolutionary Honda Eco Technology introduced this year has enhanced mileage by 11% to 74km/litre in our bikes. In the long term the consumer sentiment gets affected by rising petrol prices. We at Honda have tried to neutralise the fuel price hike by consistently increasing fuel efficiency." Here, the most obvious question is till what limit fuel efficiency of a bike can increased?
With market progressing with negatives of fuel hikes, state oil marketing firms have justified price hikes by emphasising on the rising international crude oil rates. Furthermore, such firms pursue plaintive claims that sales of bikes and scooters will not be impacted due to poor and inadequate public facilities in rural area and also point out increased youth mobility during the polling time. At least this is what can be made out from what N Srikumar, Executive Director, Indian Oil Corporation had to say. He reportedly quoted, “The petrol price hike story is perhaps here to stay for some more time, given the poor public transportation system and the not-so-bad growth in two-wheeler market. And as for elections, past trend only indicates more growth for auto fuels, both petrol and diesel.”
As per the automobile manufacturers, dynamics of the two-wheeler segment in the country are different. The consumer segment buying bikes between 100 cc and 125 cc falls in the 18-35 age group. Most of these customers are college students and office goers who prefer most affordable daily commuting means. As per statistics revealed in the report of SIAM, motorcycle sales have so far declined 2 per cent in the first five months of the current fiscal. However, scooters sales have recorded an increase of 15 per cent and by far, reigns as the only growing automobile segment in the country.
