The monthly sales figures of our car market and our two-wheeler market show an interesting trend.
On the left is the top 20 best-selling cars in India in the month of May, in 2018. On the right is the top 10 best-selling motorcycles in the month of April, in 2018.
But you will be forgiven if you think that that motorcycle sales data is from 2001! Because, even today, the best selling motorcycle in India is the Splendor. With the top five motorcycles comprising of other entry-level commuters, the motorcycle version of the A1 segment of cars.
On the other, the best selling car in India in the month of may was a sub-4m sedan. A car with an average 'ticket value' of around Rs 7 lakhs, more than twice that of the second best selling car, the Maruti Alto. If this was mirrored in the motorcycle market, then the Bajaj Pulsar 220 would be been the sales topper, and the Splendor would have come second.
In the real world, the Pulsar sold just 6912 copies that month, just 1/40th of Splendor's sales numbers!
Going further down the sales chart, the third best selling car in India is a premium hatchback, whose average showroom price is even higher than the Dzire. On the sixth place is a Rs 10 lakh SUV, on the seventh is a Rs 15-lakh SUV and on the sixteenth place is a Rs 20 lakh MPV, 6071 of which were sold in May - or about as many Pulsar 220s!
An Innova is on an average six times more expensive to buy than an Alto, which is reflected in their sales figures, 21890 for the Alto vs 6071 for the Innova, a ratio of about 1/3.
A KTM 390 is about six times as expensive as a Splendor, but comes nowhere close to the Innova/Alto ratio. Against the 266,067 Splendors sold in May, only 800 KTM 390s found a buyer!
Infact, for all the non-stop media coverage and advertisements, performance/premium bikes do not really sell that many.
Quote:
Bajaj Dominar 400: 1373
KTM 390 : 800
KTM 200 : 2672
Honda CBR 250R : 559
Mahindra Mojo : 41
Royal Enfield Himalayan : 1029
TVS RR310 : 862
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I know, this is not correct way to analyse this data, and it would wrong to come to conclusions by merely looking at sales figures of equivalently priced bikes and cars.
But thing which is interesting here is how the two markets have diverged over the years and the rate at which they have done so. Ten or even five years back, the top-five best selling cars would have been 800, Alto, Wagon-R, Santro etc. Today, the average car buyer in India spends a lot more than he would have a decade back. A lower price no longer guarantees sales performance today, the greatest example of that being the Tata Nano.
It also reflects the rate at which income has grown for people who were in that segment who could afford cars ten years back. The high rate of income growth in the upper-ish middle class has allowed them to upgrade to more expensive cars, faster. Not only are they ditching off their first cars which were Altos, Swifts and Santros, but they upgrading by jumping segments, going from an Alto to a Swift Dzire. Or from a first gen-i20 to a Creta.
On the other hand, the Altos, Omnis and Boleros are being bought by many who are upgrading to cars for the first time.
But then hasn't the motorcycle market changed in a similar way?
There are millions who are still buying Splendors. Hell, TVS even sells 67,000 XL Super Mopeds every month!. There is not much value-addition which is taking place in the Indian motorcycle market. Why is that?
It is, I think, because of a couple of reasons:
1. The lower middle class income is not increasing as fast as upper middle class income. Families which can afford to buy a motorcycle are just stuck there, with an disposable income which can afford just that one motorcycle. They best they can do is trade it in for a new 100cc commuter every, say ten years.
2. Those whose income is increasing, are making the jump from 100cc motorcycles to a 125cc one. And then, straight to a Maruti Alto. (Or even a second hand car - 5 million of them are sold in a year!)
3. Pulsar NSs, KTMs, expensive Hondas, TVSs are being bought by those who can also afford cars. Therefore, it is more of a impulse/luxury buy for them. The buyers for these motorcycles do not seem to be coming from the pool of owners of their less capacity cousins, but they seem to be coming from the car market.
For eg, if Hyundai sells 1 million i10s, it can then expect that a vast number of them will buy a car again sometime in the future and maybe Hyundai can entice half of them to buy another Hyundai. Which could be an i20 or an Excent or a Creta etc.
But Bajaj does not seem to have that luxury by having a pool of a million Pulsar 150 owners. Would a vast majority of them move and buy a 180? And then a 200? Or go from a 150 to a 220? It does not seem so. There is a precipitous drop between Bajaj 150 sales (48000+) to Bajaj 220 sales (7000). In-between, some cannot upgrade anymore, and those who can, move onto cars.
NOTE:
- I could not find the two-wheeler sales data for May, and hence I used the April one.
- It is a scooter which is India's best selling two-wheeler, and not a motorcycle.
I did not include scooter sales, because an answer to where are the buyers for higher-end motorcycles, could be found in the scooter sales figures. But again, what I feel is that a size-able number of scooter sales are going to households which already have a car. Or at-least, the income structure of a an Activa or an Access buyer, is that of a person who can also afford a car. Therefore, motorcycle owners are either upgrading laterally to a scooter, or they are upgrading to a garage which consists of a small hatchback and a scooter for the missus.
So, one part of our motorcycle market is behaving as if it is in '90s India, the other part is behaving as if it is in a developed market, where motorcycles are a luxury item.
I based all my conclusions on just gut feeling, and not much scientific data analysis, so I might again be totally wrong.
But it is something to talk about...