Then there were two

Petrol prices have crossed Rs300 per liter which is sending shockwaves across the country. This will roll over to a bigger bump in the prices of other commodities which will intensify the burden of inflation on consumers, resulting in a deeper decline in their buying power. Naturally, the economy may witness shifts in consumption patterns and purchasing decisions. For instance, fuel efficiency in vehicle usage may become near existential for regular commuters.

Would it be so surprising for sedan users to swap out their vehicles for a smaller model such as the latest Alto which is perhaps the most fuel-efficient vehicle in the market right now? Or less fuel efficient but small car owners to swap out their Cuore for a motorcycle? Latest numbers reveal little. In Jul-23, motorcycle sales stood at roughly 72,000 units, the lowest volumes over the past 9 years, safe for those two months during covid when everything was shutters down. This does not inspire too much confidence.

Honda continues to reign supreme, dominating the market at 86 percent share in latest numbers. As the manufacturer and supplier of Honda CD70 and Honda CG125, the most fuel-efficient motorcycles selling at a price point consumers are happy with, this doesn’t come off as a surprise. Road Prince and United Motorcycle had begun to gain market share when they were launched in 2014 due to their affordability but in the past two years, have lost significant steam to fresh Honda buyers and perhaps Honda loyalists reverting back.

But the other aspect is the used vehicle market, which for motorcycles is a thriving one with options aplenty and affordability at the centre of it. Motorcycle buyers may first visit their local used vehicle market for estimates, before treading down the path of booking a new two-wheeler which have becoming significantly more expensive.

Over the past two years, cars are not the only vehicles that have witnessed dramatic price hikes. Atlas Honda in fact, jacked up the prices of its two-wheelers six times in the span of a single year. This was the primary reason for motorcycle sales to fall to their decade-lowest volumes. For the market motorcycles serve, the sensitivity to price increases is much higher than say, cars which show a certain level of resilience when prices are hiked.

There may be more hikes in prices on the cards for motorcycles which may put a dampener on potential buyers hoping to switch to two-wheelers. However, nearly all motorcycles can be bought on an instalment plan with 0% mark-up. One can purchase any motorcycle on an instalment plan (typically with a 3-to-9-month tenor) on Daraz or AlfaMall and pick it up in 15 days.

As September rolls in, and commuters feel the heat of even higher inflation on their backs, where reducing consumption of petrol may not be always be possible, will we see significantly more motorcycles on the road than ever before? It’s a sobering thought.