Sales of motorcycles in Delhi, Mumbai and Pune dropped by a staggering 30-50 per cent during the festival period between Dhanteras and Diwali this year compared with the same period last year as customers kept away because of the ongoing liquidity crunch.
Dealers record 13-15 per cent of their annual sales during the Diwali period, considered auspicious in northern and eastern markets of the country. (Pongal and Aadi are considered auspicious in the southern market).
“While we sold about 140 units last year, we could manage only about 65 this year, with Diwali single-day sales of about 20 vehicles,” says Sandip Gupta, proprietor of Ganpati Auto Deals, which sells multi-brand two-wheelers.
Bleak sales were also witnessed by Wheelz Automotive, a two-wheeler dealer in Mumbai’s Sion area. This year’s Diwali sales dropped by 35 per cent compared with last year, said owner Imran Khan.
All motorcycle dealers Business Standard spoke to said cash was the preferred mode of payment on these days. Analysts say this reflects the sharp drop in availability of two-wheeler financing that began with banks like ICICI, Citibank and non-banking finance companies like Cholamandalam Finance pulling out due to rising defaults.
Current interest rates for two-wheeler loans on a diminishing basis are at an all-time high of 18-22 per cent. “Lack of financing is pushing people to postpone their purchases until interest rates soften to last year’s levels. The overall sentiment is to adopt a wait-and-watch approach,” says Rahul Bhatnagar, VP (sales and marketing), Kinetic Motors.
Two-wheeler dealers say sluggish sales are also due to the general bearish sentiment during this festive season. “With stock markets down by almost 50 per cent, people have no money to spend during Diwali. Hence the fall in motorcycle sales,” says Kamlesh Ramrai, proprietor of Super Trades motorcycle outlet in Mumbai.
More From This Section
With nothing much to hope in the November-December period as this is a traditionally lean period, motorcycle majors are setting their sights on rural markets.
“The harvest season has just begun. That should be our next focus,” said HS Goindi, senior vice-president, TVS Motor Company.