Having achieved year-on-year sales growth during the Navratri period, two-wheeler major Honda Motorcycle and Scooter India (HMSI) now expects stable demand to last beyond the festive season.
Notably, the two-wheeler major has recorded a YoY sales growth in the nine-day period, which marks the arrival of the festival season in India.
This period is known for higher sales which are supported by new models and discounts.
In an interaction with IANS, Yadvinder Singh Guleria, Director, Sales and Marketing, HMSI, pointed out that sales growth during the start of the festive season has come on the back of many factors.
"There are a number of reasons behind this lower digit sales growth, especially the full unlock process that has taken place in the urban areas. Then, there is the pent up demand, introduction of new models, propensity of more customers to move from the public transport infrastructure to personal mode of mobility," he said.
"There is now an increasing need of mobility in urban India as offices open up and more and more people venture out," he added.
According to Guleria, retail finance availability at a lower rate of interest from the bankers has aided in accelerating the sales momentum.
"The end of moratorium period from August onwards and the continued low repo rate which has been extended by the RBI to the banks basically to fuel the lending in the market has now started giving results. In September, we have seen a jump of almost 4 per cent in retail finance," he cited.
Besides, Guleria expects the company to post positive retail sales growth during the festive season. However, the prediction comes with a caveat mandating stable or receding trend of Covid-19 infections.
"There are factors which are not in our control and no one can predict them. If everything continues in the same manner, single digit positive growth can be seen. Diwali is on November 14 and November 12 is Dhanteras, we are still over two weeks away from that. So, what happens in these two weeks simply can not be predicted."
Furthermore, Guleria believes the demand momentum will last beyond the festive season but at a slower pace.
"The government's intention is very clear that economic activity must go on and there are also indications that colleges and schools are also going to open. We have missed the demand for two wheelers from students and the faculty of colleges and universities," he said.
Traditionally, the two-wheeler industry sees a spike in average demand during July-August every year, as the new academic session begins.
"Additionally, many other industries are slowly limping back. Over a period of time, people employed with these industries will also get back their buying power. So, these factors will surely add some additional demand to the market.
"There could be some level up going forward. It will not be like the festive season demand spike, but we expect the positivity to continue," Guleria said.
In September, HMSI reported positive sales growth for the second consecutive month in FY21.
The company's YoY domestic sales zoomed by double digit to 10 per cent growth to close at 500,887 units compared to 455,896 units sold in September 2019.
It exported 25,978 units and clocked a total sales of 526,865 units in September 2020 compared to 485,663 units sales in September 2019.
(Rohit Vaid can be contacted at email@example.com)