The two-wheeler segment is witnessing an export downturn. Read on to find out why.
09-Jan-2023 •Samridh Rela
It is turning out to be a bittersweet fiscal for two-wheeler manufacturers. While their domestic sales volumes have been impressive, their export numbers are gradually declining and showing no signs of stopping.
Bajaj Auto, the segment leader in terms of export, witnessed a 20.8 per cent decline in its export volumes in the first nine months of FY23. And its peers are not faring any better.
So, what is keeping Indian two-wheelers homebound?
Macroeconomic headwinds: Rising inflation and weak demand in Africa and Latin America, key geographies for two-wheeler export leaders like Bajaj Auto, Hero MotoCorp and TVS Motors, have been the primary reasons behind the present export woes. Further, the prevailing economic crisis in Sri Lanka has worsened the export decline.
The curse of a high base: FY22 was a year of rally for two-wheeler exports, with a 39 per cent jump over export volumes in FY21. As expected, it has become increasingly difficult for auto manufacturers to sustain the volume growth this fiscal.
Currency depreciation: The US Dollar appreciation in the past few months has led to double-digit depreciation in most currencies. This has impacted the affordability of two-wheelers in emerging economies.
While the sector continues to be hopeful about a recovery in the upcoming quarters, it is too early to say if things will pan out as expected.
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