“Yes, the GST cuts as you remember came in right at the end of Q2. They came into effect on 22nd September. But we were all anticipating that combined with the festive cheer it is going to be a very-very strong retail month. So, there was some preparation for that in September. So, I would not say that the Q2 has captured all of the upside of the GST rate cut. Q3 should do that,” Sharma said.
He noted that the market experienced volatility after the announcement of GST rate cuts, but sales surged as the Navratri season began. “It was a complex time to analyse because once the GST rate cuts were announced, the market went into a nose dive expectedly and then, of course, it shot up as soon as the Navratas commenced on 22nd and the strong retail performance continued right up till end of October. But accounting for the fact that there are so many moving parts, when we look at it we feel that it has made a difference of about 6% to 8% points to the growth,” Sharma added.
April to August had seen a slight decline of around 1% in the motorcycle industry, but the GST cuts and festive demand lifted the domestic market to an estimated growth of 6% to 8%, particularly in higher-end models. “Even here as we have seen this growth, we feel that the best benefit of the GST rate cut has actually in the immediate term been the quality of the growth. Of course, the growth has gone from minus one to plus, but it is the quality of growth. In each segment we have seen the higher-end variants. For example, our higher-end variants in the 150cc segment are the N series and the NS series, they have actually rocked. They have grown at multiple times. So, it is people with the stronger wallets have actually jumped into their consumption cycle and realized their aspirations and that has impacted the better part of the portfolio doing much better and we hope that that may continue, that should continue,” he explained.
Addressing market share concerns, Sharma acknowledged a temporary decline in the overall market share from August onwards. “You have already answered the question, but you are spot on. In the season what happens is generally the 100cc segment outperforms in these one or two months and our core focus has been the 125cc plus segment and we have obviously lost market share in the 100cc segment which is usually 45% of the industry, but in this period it swells up to 48-49% and that has dragged the overall motorcycle market share down. But between Q2 and October, our assessment is that in our core area we have started to claw back market share and market share has improved led by a very good performance, like I was saying earlier, by the 150cc plus subsegment,” he said.
Sharma also highlighted supply constraints that impacted the e-vehicle Chetak, which could only fulfil 50% of its planned deliveries. “I would sort of say that the supply constraint dragged that down. It had a little bit of a downward impact though and now that the constraints are gone, we are looking and as you know that in October Chetak again went to pole position and we are hoping that it will continue to do well,” he said. On the exports front, Sharma reported record-breaking numbers. “Yes, in October we reached the 200,000 unit mark and even Q2 from a revenue term it was above percent growth which was an all-time high for us. Like I have been saying we think that we should be able to maintain the 15% to 20% growth tempo. Hopefully, we should breach the two lakh mark again in November. Then, the market itself takes a dip because a lot of these export markets have their season in around Thanksgiving and Christmas, etc, and there is a winter then. So, it goes through a little bit of a natural dip but irrespective we hope to maintain this growth tempo of 15% to 20% and that should be outpacing the industry growth,” he said. Sharma added that the export growth is broad-based across regions, with LATAM markets, particularly Brazil, performing strongly. African markets have stabilized, while Asian markets like Sri Lanka, the Philippines, and Nepal are contributing positively. He also noted strong growth in three-wheelers, indicating a diverse export demand.
“The great thing is the growth story in export is quite broad-based, not just in motorcycles, but I would say three-wheelers is at an all-time high in exports and that too can be attributed to a number of markets, I cannot single out one market. So, to that extent it is a very good thing for us,” Sharma concluded.