New Delhi: TVS Motor Company expects domestic two-wheeler sales to remain flat during the current fiscal due to “marginal and slow paced” revival in economic activity.
In order to overcome the challenges, specially due to slump in rural demand, the company plans to launch a slew of products this year.
“Revival in economic activity appears to be marginal and slow paced. With a nominal growth in crop prices, unseasonal rains, stagnating rural wages and declined rabi output, weakness in rural economy appears to persist,” the Chennai-based company said in its annual report for 2014-15.
Increasing probability of El-Nino effect can result in poor spatial and seasonal distribution of rainfall affecting kharif production, it added.
“Consequently the growth in two-wheeler industry in 2015-16 is expected to be flat at 9 per cent as in 2014-15,” the company said.
As per SIAM, two-wheeler sales were up 8.09% for the 2014-15 fiscal at 1,60,04,581 units, up from 1,48,06,778 units in 2013-14.
TVS Motor, however, remains optimistic about the long term growth prospects of the two-wheeler industry.
“Even though Indian economy is experiencing a slow growth phase, the long term prospects for two wheeler industry continue to be attractive,” it said.
Continued investment in infrastructure, economic reforms and well distributed monsoons are essential for sustained growth in consumer demand, it added.
“A slew of new launches that has been planned in 2015-16 will further strengthen the presence of the company in two wheeler industry,” the company said.
It, however, did not disclose the product launch details.
During the last fiscal, the company launched various new products and refreshes including TVS StaR City+, TVS Sport, TVS Scooty Zest 110, TVS Wego 110 and TVS Jupiter.
During the 2014-15 fiscal, the company sold a total of 24.1 lakh two-wheelers, growing by 20.9% over 2013-14.
The company’s motorcycle sales increased by 21% during the financial year while scooter sales saw a rise of 47.7% during the period.
For the first quarter ended June 30, 2015, the company’s motorcycle sales grew by 11.8% to 2.55 lakh units from 2.28 lakh units in the same period of the previous fiscal.
Scooter sales grew by 8.6% during the first quarter at 1.65 lakh units as against 1.52 lakh units during the same period of previous fiscal.