Two-wheeler output declines 5.8 pc

Thanks to better fuel economy, a distinct shift in demand from scooters/mopeds to motorcycles is being witnessed by the industry. While motorcycles sales grew by over 20 per cent in the first nine months of current fiscal, scooters and mopeds sales slowed down to three and 4.6 per cent respectively. Delhi-based Hero Honda sold the maximum bikes at 3.85 lakh units showing a 31.1 per cent increase in its sales. TVS Suzuki’s performedwell with its sales exceeding the industry average.

Pune-based automobile major, Bajaj Auto’s scooter and moped sales dropped as it recorded a five per cent decline in its net profit for the nine months ended December 1998. Bajaj’s next door, Kinetic Honda took the maximum brunt of sagging scooter sales with a 17.9 per cent drop. The commercial vehicle segment witnessed some activity with its sales and production showing some improvement in November and December. However, for the nine month, the sector performance was quite dismal. The surge in December was mainly led by medium and heavy commercial vehicles which recorded a growth of 30 per cent in production and 62.9 % in sales.

Both loss-making Telco and Ashok Leyland have pruned their production by 15-20 per cent and sales by 25-30 per cent. Telco reported a net loss of Rs 76 crore as compared to a net profit of Rs 186 crore recorded in the same period of fiscal 1998.

Telco, however, managed to extract a Rs 200 crore bonanza from thefinancially-ill Maharashtra government which announced a sales tax incentives for automobile and auto components sector involving an investment of Rs 1,500 crore. These tailor-made concessions for Telco include exemption of 10 per cent state sales tax, two per cent central sales tax and six per cent purchase tax.

Though Telco has not announced its intentions to pass on the benefits to the consumers of its recently-launched small car Indica, analysts say that this move by the state government will contribute to the overall fall in state’s economic health. Sluggish demand continues to affect passenger car segment as sales in December 1998 showing a sharp decline of 22.8 per cent to 23,552 units. Total sales of 2.9 lakh cars was down by 5.2 per cent over the same period of last year. US car makers Ford and General Motors witnessed a major drop in their sales — thanks to expensive and unsuitable models launched by these companies in a sluggish market.