Chennai: Discounts and incentive schemes have disappeared from the motorcycle and scooter market even though July-August monsoon months — Shradh or Aadi — are the weakest marketing periods for two wheeler sales.
Under a normal circumstances, company and dealer schemes as well as discounts during this season leading up to Shradh in the north vary from around 7%-10% of vehicle price. But this year, lockdown losses and a demand that’s higher than supply have meant neither companies nor dealerships are offering any discount. “Right now no company or dealership is offering any discounts or benefits except may be in some niche geographies,” said Nikunj Sanghi who runs Hero Motocorp dealership JS Fourwheel Motors in Alwar. Normally, Q2 is the weakest quarter for two wheeler sales due to the monsoon and shradh and companies use this time to build inventory for the festive season. “That’s why discount/benefit offers ranging between Rs 1,500-Rs 3,000 is normal during this monsoon season,” added Sanghi. This year however the discounts have vanished. Several reasons have contributed to this. “Because of BS6 transition inventory pipelines were empty when the lockdown happened,” said Sanghi. “Now two wheeler companies are taking time to ramp up production and the supply constraint is a bigger challenge than demand which is boosted both by rural pull and the pent-up demand.”
Also dealers have suffered heavy losses during the 45-60 day zero sales period so “they cannot afford to pay any discounts,” he said.
Financiers say so far June-July hasn’t been a washout. “June sales of two wheelers were good and loan disbursements were also good. I am told July isn’t as good as June,” said YS Chakravarthy, MD, Shriram City Union Finance, India’s largest two wheeler financier by volume.
Dealers however say the percentage of financed vehicles and the percentage of financing have both fallen with banks and NBFCs turning cautious. “Earlier 90% of on-road price could be financed but now it is 75% and financiers are also cautious so the cash sales have been going up particularly in semi urban and rural markets,” said a FADA official.