Higher upfront insurance costs and tighter liquidity causes a speed bump in two-wheelers market

India’s leading two-wheeler makers, who have seen steady growth in sales through most of the current fi nancial year on the back of increased consumption in rural markets after three consecutive years of favourable monsoons, faced pressure on sales last month.

Industry sources said the change in insurance norms before the festive season increased the cost per two-wheeler by around Rs 4,000 (approximately 10% of the cost of the vehicle), adversely impacting demand.

Improved liquidity in the market and the Sankranti and Lohri festivals in mid-January are expected to push up sales in the fourth quarter.

Market leader Hero MotoCorp’s sales declined 4% last month; Royal Enfi eld’s sales slid 14%.

Bajaj Auto bucked the trend, with volumes growing 31% to 298,855 units, while sales at TVS Motor Company increased 4% to 258,709 units.