The growth of sales of electric two wheelers have started coming down after some manufacturers hiking prices of their products to offset impact of rupee depreciation in the last few weeks.
Since October, about 5—6 companies have hiked the prices by 3—4 per cent to offset the impact of currency fluctuations, according to Society of Manufacturers of Electric Vehicles.
Currently electric two—wheelers are available between Rs 26,000 and Rs 40,000 depending upon specifications and models.
“Sales have started slowing down after prices of the products were increase since October due to falling rupee.
Currently the market is growing at a rate of around 40 per cent,” Society of Manufacturers of Electric Vehicles (SMEV) Director, Mr S ohinder Gill, told PTI.
This is in contrast to 50—60 per cent sales growth witnessed till October in this fiscal, he added.
“Due to rising prices of the fossil fuels, people were attracted towards eco—friendly electric vehicles. For the entire fiscal, we are expecting a growth of 50—55 per cent as the market is expected to pick up again,” Mr Gill said.
Electric two wheeler sales in India so far this fiscal has already crossed the 70,000 units sold in 2010—11.
When asked about the impact of weakening rupee, Mr Gill said: “The impact of falling rupee is high on our industry.
Most of the electric two wheeler makers import some important parts such as batteries and motors, which comprise 40 per cent of the product’s total cost.”
The impact has been huge. However, the companies are trying to absorb it as much as possible. While there were needs to raise the prices by 10—12 per cent, the quantum of price increase was just 3—4 per cent, he added.
Asked if the industry will further pass on the burden to consumers, he said: “I don’t think so as it depends on acceptance of the market. If we pass on the entire burden, demand for our products will fall.”
He said due to high input cost and currency fluctuations, margins of most of the electric vehicle manufacturers are under pressure and they are incurring losses.
Mr Gill, who is also the Chief Executive Officer of Hero Electric, said his company is growing at 70—80 per cent in this fiscal. Hero Electric currently enjoys about 45 per cent share in the domestic electric two wheeler market.
After touching an all time low on Tuesday, the Indian rupee gained 32 paise to Rs 51.92 per US dollar in morning trade on Wednesday on the Interbank Foreign Exchange, tracking gains registered by other Asian peers against the American currency.