Monsoon can damage the auto industry!
Two-wheeler manufacturers of India feel that a poor monsoon can cause a decrease in the number of units that can be sold in this season.
A majority of the two-wheeler market depends on the rural and semi-urban market. Poor rains could hit the income and sentiments in thesr regions most of which depends on agriculture income. But it is early to say anything concrete.
A weak monsoon is a matter of concern as the industry looks a lot to rural markets for growth. India’s largest two-wheeler manufacturer, Hero Honda, which holds over a 50% share of the domestic two-wheeler market, makes 40% of its sales through rural and semi-urban markets.
Bajaj Auto Limited feels that it would not be impacted much, because its portfolio comprises of high-end bikes that are not big sellers in rural areas. And, officials at Honda Motorcycle and Scooter India believe that one season of bad monsoon does not make a very big difference, and in any case, farmers would have already taken this into consideration and made alternative arrangements for irrigation.
A poor monsoon could impact demand in four-wheelers as well.
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