India's leading two-wheeler manufacturer - Hero MotoCorp - has made an announcement that there would be another price increase for its motorcycles and scooters. The aforementioned manufacturer stated that this will be put into effect from July 1, 2024. With the exact amount varying based on the specific model and market, the price hike is said to be up by INR 1,500. Hero MotoCorp has also stated that the growing input costs is the main reason behind this latest price hike. Also, the company has highlighted that the revision is necessary to partially offset these increased costs. And citing part of the price review that the company undertakes from time to time, the company raised prices by around 1.5 percent for similar reasons in July 2023, keeping in mind various factors like price positioning, input costs, and business imperatives.
The auto industry as a whole is facing a similar challenge, i.e., an increase in raw material prices. And since January, China’s spot steel HRC prices, which is a key raw material, faced a 6 percent downturn. It is also noteworthy to note that the spot prices of aluminium, copper, zinc, and tin were up by 9.7%, 12 percent, 7.2%, and 28%, respectively. Furthermore, input rates for the sector had gone up, leading the prices to rise on the London Metal Exchange (LME).
Showcasing an uptick in demand for most months, Hero MotoCorp's sales figures for the first five months of 2024 has been commendable. As per the data from FADA (Federation of Automobile Dealers Associations), January to April saw a positive trend with increases ranging from 10.55% in January, 5.74% in February and a 24.42% increase in April. However, May sales figures dipped by 16.04% if we compare it to last year’s May data.
Additionally, the data from FADA shows the Indian two-wheeler industry had witnessed a positive growth trend in the first five months of the current year (2024). And if we compare it to the same period in 2023, overall sales has witnessed an upsurge in all months so far. With a jump of 33.18% reaching 16,43,510 units as compared to 12,33,763 units in April 2023, the strongest growth came in April. This performance can be greatly attributed to the underlying factors such as growing demand and improved market sentiment.
