India's largest two-wheeler maker Hero Honda on Saturday reported a 5.7 per cent dip in motorcycle sales during February at 2,65,431 units, against 2,80,515 units in the same month last year. The company said it expects sales to improve post the reduction in excise duty. It is passing on the entire benefit of the duty reduction to the customer and has cut prices by up to Rs 2,400.
"Hero Honda has taken the voice of the customer to the government, and consequently the excise duty on two-wheelers has been reduced to 12 per cent from 16 per cent. This is a welcome move, and we are happy to pass on the entire benefit to customers. The reduction in excise duty cut will enable us to draw more customers to our fold," Hero Honda Managing Director and Chief Operating Officer Pawan Munjal said in a statement. He said issues like credit financing have not been addressed, which were required to push sales.
"The basic factors causing the industry slowdown still remain unattended. Credit Financing has been withdrawn in some key markets, while interest rates on consumer loans also remain very high. This credit squeeze continues to be the most critical factor adversely impacting industry growth," Munjal said.
Bajaj Auto Ltd, the second-biggest motorcycle maker, on Saturday said vehicle sales in February fell 9 per cent to 183,807 units from 202,212 units last year. It said motorcycles sales fell 8 percent to 158,662 units from 171,780 units, and total two-wheelers sales also fell 8 percent to 159,508 units from 174,220 units.
Sales of motorised three-wheelers fell 13 per cent to 24,299 units from 27,992 units last year, Bajaj added in a statement. The company, which is studying the feasibility of making a $3,000 car with Renault and Nissan Motor Co, said exports rose 65 per cent to 63,182 units from 38,228 units. Bajaj said it expected its focus on 125 cc motorcycles and international markets to result in positive overall growth for 2008/09.
