Entry-level car, bike sales skid on high prices – Times of India


NEW DELHI: The pace of personal mobility adoption in India is slowing down at the bottom end of the market as vehicles get expensive on regulatory and emission requirements, while income levels at lower end of the economy have not kept pace with inflationary pressures.
Sales of mini cars, or those under 3,600mm, have more than halved since their peak seven years back (down 57%), while that of entry-level motorcycles are down by 38% since 2017-18 (the last peak), and scooters by 27%, according to numbers from industry body Siam.
Even mopeds have seen sales go down by 50% in past five years, indicating new customer additions at the entry-level has started to go down even as upper sections of the mobility world — including premium and luxury cars as well as bigger motorcycles and scooters — continue to do well.
The trend has only been strengthening over the past few years, leading to fears among a section of the industry that there may not be enough bench strength in the market to feed the bigger and premium categories later. “The aam aadmi is clearly not able to afford vehicles,” an industry official said.
According to Siam data, sales of mini cars where Maruti Alto dominates, with other models being Maruti S-Presso and Renault Kwid, have come down from 5. 8 lakh units at end of 2016-17 to 2. 5 lakh units at close of FY23 (see graphic). Companies are worried, and say the trend needs to be corrected. Shashank Srivastava, director (sales & marketing) at Maruti Suzuki, said various assessments have shown that price of entry-level mini cars has gone up by 25% over last three years, while the income level of potential buyers has not kept pace. “The customer in this category is very sensitive to price variations. Also, increases in fuel prices impacted decision making and purchases. ”
C V Raman, chief technology officer for Maruti Suzuki, said that pressure is there on the industry as the entry-level category is not firing. “Small cars are also important for sustainability and carbon neutrality. ” However, he conceded that companies will go where the customers are. “We will go where the volumes are.”
Ranjivjit Singh, chief growth officer at country’s biggest two-wheeler maker Hero Moto, also said rural markets have been impacted by price increments. The company gets 50% of sales from rural segment.
An official of the two-wheeler industry said prices in the segment have gone up by 35% due to regulatory changes, as emission and safety standards got stricter, while insurance liabilities for customers went up. “The impact in last one year will be around 17%.”


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