Atsushi Ogata, HMSI: Indian 2-Wheeler Industry to Grow by 10% in FY23

Although all divisions of the domestic car industry have had significant development, the two-wheeler market has not yet reached its prior high of FY19, which was 21 million units. However, the second-largest two-wheeler manufacturer in the nation anticipates it to occur by FY28. For FY23, the industry will record a 10% YoY growth to reach 14.81 million units in the nation.

Although the two-wheeler industry experienced better feelings throughout the holiday season in 2022, it is still having trouble because industry volumes are still below their pre-covid peak levels. Moreover, the tendency is only seen in the entry-level commuter category of two-wheelers, indicating that it has affected the purchasing power of customers at the base of the food chain.

“The positive momentum in the industry is expected to continue, and the two-wheeler sector is expected to grow over 10% on a year-on-year basis. High fuel prices and vehicle price hikes are some of the headwinds,” Atsushi Ogata, Managing Director, President and CEO of Honda Motorcycle & Scooter India (HMSI), told the press recently.

In FY 2018–19, the sector saw domestic sales of 21.17 million units; by FY 2021–2022, those sales had fallen to 13.46 million units.

Although the economy as a whole is returning to normal, the rural market has not yet recovered. However, according to Ogata, we anticipate that positive growth will pick up speed in the upcoming fiscal year FY 2023–24.

“Depending on inflation, GDP and the growth of the EV market, it will take about five more years for the industry to reach peak sales volumes of FY19,” he added.

The two-wheeler sector is anticipated to increase by 9–12% in FY23, as per the rating agency ICRA. The sector’s outlook for FY24 has been given a steady outlook, and it anticipates a moderate increase of 6-9% on a shortened base, with a return to FY19 high volumes at least 2-3 years away.

Company’s Roadmap for 2023

Following the recent government regulations, the firm said, “it is fully prepared with On-Board Diagnostics (OBD) Phase-II norms to be applicable from April 1, 2023. The average price increase due to these regulations is expected to be around INR 1,170. “We will be able to offer the technology across the model portfolio by June.”

HMSI unveiled its new Activa with Honda-Smart technology on Monday. Additionally, it is the company’s first scooter that complies with OBD-II.
 

Additionally, the company that makes Activa scooters is working on a project called “Futuristic Activa” and has intentions to enter the EV market in the fiscal years 2023–2024. Its initial electric vehicle (EV) model will be built on an existing platform and use an electric powertrain in place of the internal combustion engine (ICE). The “Futuristic Activa” idea, which is based on an entirely new platform and design, will be the second model in the electric lineup.

“In CY2023, investments are planned towards meeting OBD-II norms, biofuel technology, connectivity in vehicle portfolio and our electrification journey,” Ogata said.

With the release of the Vida V1 in October of last year, Hero MotoCorp made its entry into the market for electric mobility among manufacturers of traditional two-wheelers. While TVS Motor sells the iQube, Bajaj Auto sells the Chetak electric scooter. Among the other participants in the market are Ola Electric, Ather Energy, Okinawa Autotech, Hero Electric, and Ampere Vehicles.

By the middle of March this year, HMSI will also launch a new motorcycle in the 110cc entry-level two-wheeler segment to signify its presence in the commuter market. Due mostly to the motorcycles sold under the Splendor brand, competitor Hero MotoCorp currently holds the top spot in the commuter bike market.

The difference between the domestic sales volumes of the top two two-wheeler manufacturers has closed for the current fiscal year. In the first nine months of FY23, Hero MotoCorp sold 3.92 million units, whereas HMSI sold 3.32 two-wheelers during this time.

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