The country's largest two-wheeler maker Hero MotoCorp on Wednesday reported a 4 per cent decrease in its December sales year-on-year (YoY) to 4,53,985 units as compared with 4,72,731 units in the corresponding month previous year.
The increased cost of two-wheeler insurance ahead of the Diwali festive season and the prevailing liquidity crunch in the market impacted the overall growth momentum in the industry during the third quarter, the company said.
‘Severe stress’
“2018 was a challenging year for the global economy. While the continuing volatility in currency and commodities slowed down the pace of growth, the global geopolitical and trade conflicts also affected sentiments in markets and industries across the world,” Pawan Munjal, Chairman, Hero MotoCorp, said.
“With an improved liquidity in the market and the upcoming festive season in many parts of the country, the industry is expecting a positive turnaround in the fourth quarter,” he added.
‘Reduce GST rate’
The cost of two-wheelers will further go up once the new set of safety regulations comes into force, followed by the transition to BS-VI emission norms. All these will put severe stress on the extremely cost-sensitive commuters, for whom the two-wheeler is a lifeline, he said.
“Given that two-wheelers provide basic mobility to the masses, there is an urgent need to reduce the GST rate on two-wheelers from the 28 per cent bracket of ‘luxury goods’ to that of 18 per cent for mass usage items,” Munjal said. “This will provide the much-needed relief to millions of two-wheeler customers across the country, as well as the entire value chain dependent on the sector,” he said.