This week in Auto: Two-wheeler companies struggle with high inventory; electric three-wheelers make a beeline

Published On: 23, Feb 2019 | Source: moneycontrol.com

Swaraj Baggonkar @swarajsb

New launches dotted the week’s headlines which included two high-end motorcycles.

The market for bikes above Rs 5 lakh is tempting every global manufacturer. But, there is a market for the unglamorous yet interesting segment -- electric three-wheelers. Not much is known about it as it is at a nascent stage but companies are excited about its prospects. More on that later in the copy. Here's a complete look at what created news in the auto space this week.

Yamaha launches MT-09 in India at Rs 10.55 lakh

Yamaha launched the 2019 variant of its naked sport bike, the MT-09, at a price of Rs 10.55 lakh (ex-showroom, Delhi), which is a price hike of nearly Rs 15,000 over the current generation.

The bike was first introduced to India in November, 2018 as a completely built unit (CBU) priced at Rs 10.88 lakh . A few months later, the reduction in CBU customs saw a significant price cut, with the price being revised to Rs 10.4 lakh.

Royal Enfield strike results in loss of 3,000 units

A week after a section of the workforce employed at Royal Enfield's Oragadam plant near Chennai went on strike, the niche bike brand has suffered a production loss of 3,000 units till date, sources told Moneycontrol.

The strike has coincided with ramp-up plans of the Eicher Motors-controlled brand for the Interceptor 650 and Continental GT 650, both of which were launched in November 2018.

Two-wheeler companies struggle to liquidate stock

Even as dealers of two-wheeler manufacturers struggle to attract buyers to their showrooms, they are desperately seeking an extension of credit days to pay for the rising inventory.

The trend of weak demand during the festive season extended into January, resulting in three consecutive months of subdued conditions. Demand was expected to improve in January as has been the trend in previous years. But despite the on-going marriage season retail offtake remains poor.

Not only has inventory days (average number of days goods remain in inventory before being sold) shot up to more than eight weeks, dealers are seeking as extension in credit days (number of days before payment is made for the goods purchased)

Ashok Leyland launches new trucks

Ashok Leyland, flagship company of the Hinduja Group, has launched new offerings in the sub-heavy truck segment as it seeks to fill product gaps.

The Chennai-based truck and bus maker launched the Guru 1010 in the intermediate commercial vehicle (ICV) segment and Boss 1616 and Boss 1916 in the medium duty vehicles (MDV) segment.

Benelli launches new bikes priced at Rs 5 lakh

Italian performance bike brand Benelli launched its first adventure tourers in the Indian market with the TRK 502 and TRK 502X. The bikes are Benelli's first all-new products in India and are priced at Rs 5 lakh and Rs 5.40 lakh (ex-showroom) for the TRK 502 and the TRK 502X, respectively.

While the TRK 502 comes with 17-inch alloy wheels at both ends and Pirelli Angel GT tyres, the TRK 502X gets 19/17-inch set of wire-spoke rims shod with Metzeler Tourance tyres.

Fancy an electric three wheeler?

No less than 10 automotive companies are involved in developing electric three-wheelers with many of them in advanced stages of launching them in due course.

From little known companies like Kalinga Ventures and Lohia Auto to behemoths like Mahindra & Mahindra (M&M) and Bajaj Auto, each company is serious about the electric three-wheeler segment. This week Italian company Piaggio said it will launch a range of electric three-wheelers in a few months.

So far, Mumbai-based SUV maker M&M has made the maximum noise about their electric three-wheelers after having launched them in November 2018. Three wheeler market leader Bajaj Auto has promised to launch an electric three wheeler in less than a year.

TVS Motor Company, the maker of Apache and Jupiter two-wheelers will launch an electric three wheeler in FY20. Kinetic Energy, Electrotherm and Ampere Vehicles already have such three-wheelers in their line-up.

Besides the usual retail buyer, a major portion of electric three-wheeler demand is coming from the institutional buyers. These buyers wish to run fleets running into several hundreds of units each spread across several cities.

The rush for the electric three-wheeler is driven not just by the call of the central government to switch mass public mobility into electric from petrol or diesel but from the ownership economics of these vehicles also.

For instance, the Mahindra Treo Yaari is priced at Rs 1.35 lakh while the basic version of the petrol powered Bajaj autorickshaw is priced at Rs 1.10 lakh. With a premium of Rs 25,000 the Mahindra model provides an attractive proposition to the buyer.

An electric three-wheeler costs about Rs 0.5 per km while a petrol powered three wheeler has a running cost of Rs 4 per km. An electric three-wheeler though has a smaller driving range of around 130 kms to a full charge as compared to 190-200 kms on a full tank on petrol.

Through technological breakthroughs companies are hoping to bring down the cost of the electric three-wheeler in the coming years. But, will it give the conventional version a run for its money?
First Published on Feb 23, 2019 09:20 am