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MOSL: AUTOMOBILES-Broad-based growth for motorcycles-Economy segment growth at par with scooter growth

Automobiles: Broad-based growth for motorcycles; Economy segment growth at par with scooter growth

 

We analyzed brand-wise data for the domestic 2W industry. The 2W industry grew at 13.6% in YTD FY18. Scooter sales grew strongly by 21%, with the segmental share expanding by 200bp to 33.6%. Scooter is now the biggest segment in the 2W industry, overtaking the executive segment. Growth of 11.4% in motorcycle sales was broad-based, with the economy, executive and premium segments growing by 21.3%, 9.1% and 6%, respectively. Rural recovery is driving growth in the executive segment, which had witnessed de-growth for three years. Key highlights:

• Scooter is the biggest segment in the 2W industry with a share of ~33.6% (+200bp), as against 32% for the executive motorcycle segment (~21.6% for executive 100cc). TVSL and Suzuki gained market share at the expense of HMCL and Yamaha.
• Rural recovery drove a revival in the economy and executive segments. Economy grew at the strongest pace (+21.3% in YTD FY18) in five years.
• Executive segment recovered with ~9% growth, after witnessing de-growth for three years. Executive 100cc segment grew by ~5.4% YoY and Executive 125cc segment by 17.7% YoY in YTD FY18.
• Premium segment growth of 6% was entirely driven by RE (+22%). Ex RE, premium segment volumes were flat.
• RE overtook BJAUT to gain #1 spot in premium segment for the third straight month.
• Strong traction was witnessed in the 125cc scooter segment: Honda Grazia has been doing ~20k units/month since its launch in Nov-17, while Suzuki Access sales grew by ~58% in YTD FY18. OEMs’ focus on the 125cc scooter segment was also visible in Auto Expo 2018, which saw launch of five new 125cc scooter products.