Two-wheelers are likely to see 8-10 percent decline in growth in March, said LKP Securities’ Ashwin Patil, in an interview with CNBC-TV18, after reports claimed that the segment will see production cut by 15 percent from March to May.
The inventories levels with two-wheeler makers are very high, forcing them to cut production to rationalise inventory at the dealer level. The inventory level is as high as 80-90 days versus average levels of 20 days.
Hero Motocorp and Eicher Motors came under pressure following the reports of a production cut.
“On the two-wheeler side the combined braking system (CBS) and anti-lock braking system (ABS) safety norms implementation is going to happen from April 2019 and hence the companies are citing that the demand will be further down post April because of the cost price increase which would be happening on the two-wheelers,” said Patil.