Scooter, Mobike output nears 70% of pre-lockdown levels

MUMBAI: A strong post-lockdown preference for personal mobility choices over public transport has meant brisk two-wheeler sales, and leading manufacturers have ramped up production to 60-70% of normal levels within a month of factories opening up.According to several executives, three of the country’s top five two-wheeler makers — Hero MotoCorp, Bajaj Auto and TVS Motor — are reaching out to suppliers to ensure 60-70% of normal output for June. Total production for June could be 750,000-1 million units, depending on how well the supply chain works.If the industry manages to touch a million units, it will be almost 70% of the pre-Covid levels in February. Two-wheeler companies’ output was 1.6 million units at the end of February, according to data from the Society of Indian Automobile Manufacturers (SIAM).Rakesh Sharma, ED at Bajaj Auto, told ET that demand is normalising at a rate faster than expected. 76332373“There is a large component of pent-up demand that is driving current sales. We would need to assess the pattern carefully over the next month to understand where the new normal will establish itself,” Sharma said.Hero MotoCorp, the country’s largest two-wheeler maker, had said in an earnings conference that retail sales were closing in on 70-80% of normal levels. ‘Demand Stronger in Rural Areas’Hero MotoCorp said that earlier the company used to chase retail; now, retail is chasing production, although the base is lower.Niranjan Gupta, CFO of Hero MotoCorp, declined to give specific forecasts for the coming months but told ET that people looking to buy two-wheelers seem to opt for these sooner to be able to maintain social distancing.Sharma said demand is stronger in rural and semi-urban regions, where retail stores had opened earlier. The uptick in metros is slower. Hero MotoCorp, which sees half of its sales from the rural market, said over the past one year rural has done better than urban, and the trend will likely continue.All three plants of Bajaj Auto are operating, and the company is ready to meet the anticipated levels of demand, Sharma said.Hero MotoCorp too said that with multiple plants across India, the company can meet demand. TVS Motor Company declined to comment.

from Economic Times https://ift.tt/3fdTtg8