Delhi, India: According to a high-ranking representative at the Indian subsidiary of Japanese automaker Honda, cost increases and Covid dampers have delayed the Indian two-wheeler market by approximately a decade.
"Even if you look at Activa scooter, there has been a huge gap in price of the vehicle today and what it was around five years back," the head of HMSI stated, adding that some recovery is now being noticed. Affordability has been hit in the price-sensitive category, which led to withdrawal by many entry-level buyers, especially those in the rural and semi-urban areas.
The two-wheeler industry experienced massive reversals after reaching a record high of 21.2 million units in 2018-19, with volumes decreasing to 13.4 million units in 2021-22. Even though the number has increased this year, the final numbers would still be far below the industry highs. According to Ogata, the industry won't be able to begin setting new sales records until 2028 or 2029.
He said that HMSI has too much capacity because it reached its annual peak of 5.8 million units in India, but it could only sell about 3.9 million units in 2021 and 2022.
"The pandemic struck at the perfect time for the industry and its well-being, and the migration from BS4 to BS6 products also occurred at the same time. "The spike in commodity prices was the next accident," he stated, citing the factors that contributed to the rise in vehicle prices.
In addition, Honda intends to introduce a 100cc entry-level motorcycle by March of this year in an effort to increase production. This will compete with Hero Moto, a formidable rival that dominates the entry market.