Sales of two-wheelers have slumped in the last two months which dealers attribute to a hike in excise duty and registration charge by the government budget. According to traders, motorcycle sales have dropped by almost 25 percent.
Normally, sales remain comparatively low during the winter; but this time, a change in the duty structure coincided with the cold season, hitting the overall business, said Rajan Raj Puri, manager imports and sales administration at Syakar Company.
Syakar Company, authorized dealer of Honda and Hero Honda motorcycles, said sales of Honda motorcycles have fallen by 20 percent and Hero Honda by 30-35 percent.
According to Dinesh Ratna Bajracharya, manager sales division at Syakar, monthly sales of Hero Honda motorbikes tumbled from 4,000 to 2,600 units. Our sales have declined tremendously as our winter scheme has been delayed due to various reasons, said Bajracharya. I hope that sales will pick up once we launch the scheme, he added.
According to Puri, monthly sales of Honda motorcycles have dropped from 3,000 to around 2,400 units. Despite the slump, demand for the CB Unicorn and Dio scooter is still good. We have not been able to fulfil demand. Hansaraj Hulaschand (HH), sole authorized dealer of Bajaj motorcycles, has a similar story to tell. Our monthly sales have dropped from 5,500-6,000 units to 3,500-4,000 units, said Asish Sharma, showroom manager at HH, Teku. According to him, HH sold 42,000 units of Bajaj motorcycles in the last fiscal year. Bajaj two-wheelers have a 48 percent market share in Nepal.
Sharma said they might not be meeting this fiscal years sales target because of the slowdown. We have aimed to sell 50,000 units this year, but we have managed to sell only 24,000 units till mid-January, said Sharma.
Another prominent player in the domestic motorcycle market and sole authorised dealer of Yamaha, Morang Auto Works (MAW) has also seen a slump of 25 percent in sales.
The overall business has dwindled; and, of course, we have also been affected, said Keshab Aryal, marketing manager at MAW. Due to the slump, most of the companies were not able to announce schemes even during the New Year of the Gregorian calendar. This shows how hard sales have been affected. Yamaha motorcycles have a 30-35 percent market share in the domestic market.
Likewise, AIT, a sister concern of CG Automobiles and sole authorized dealer of TVS two-wheelers in Nepal, has seen a severe decline in sales. According to Dhiraj Luitel, sales manager at AIT, sales have dived by 18 percent. The price of two-wheelers has surged by Rs 16,000 to Rs 25,000 per unit, putting them beyond the reach of middle-income people. In addition, the market usually slows down in the winter, which has affected the sales volume, said Luitel. Sales of TVS two-wheelers have dropped from 800 units per month to 600 units, he added.
This years budget has increased the excise duty on two-wheelers by 10 percent. The government has also hiked the renewal charge for bikes up to 125 cc to Rs 2,000, up from Rs 1,880. For machines up to 250 cc, the fee has been fixed at Rs 3,500. The registration charge for bikes with a 250 cc engine and greater has been hiked to Rs 5,000, up from Rs 3,000.
Dealers are planning to announce schemes and promotional events in a bid to boost sales. AIT has already announced its winter scheme. There has been a marginal growth in sales after we launched the scheme in mid-January, said Luitel. Under this plan, customers get a free 10 mega pixel Canon digital camera on the purchase of any TVS two-wheeler. In addition, two customers are being given away a Canon camcorder each through a luck draw held weekly. The digital camera costs Rs 12,000 and the camcorder costs Rs 40,000.
Likewise, HH is giving away two invitation passes to the Bryan Adams concert on the purchase of a Pulsar motorcycle. We will be holding an exchange fair after the concert. Likewise, we will launch new schemes targeting the New Year, said Sharma.