CHENNAI: For the first time in the moped segment, sales turned positive in July-September after falling for four quarters. Additionally, sales in October and November indicate that rural consumption is picking up, pushing moped sales. And the segment is a single-product, single-company market — commanded by TVS Motor.
Sales crashed from July-September 2019 up until April-June 2020, before the prop-up came in the second quarter of this fiscal. TVS has done well with the moped, selling over 4 lakh units of the XL100 in the April-November period so far, despite a washout first quarter. And yet, when contacted, none its competitors said there were any plans of cracking this segment.
“Traditionally, mopeds have their own market in the southern part of the country, supported significantly by the fact that states like Andhra Pradesh and Telangana give subsidy to small farmers and fishermen to buy a moped,” said rating agency Icra VP Shamsher Dewan. The reason why there has not been that much interest so far in mopeds is because the value of the market is not very big and mopeds have, for the longest time, languished at the bottom of the sales chart.
A TVS Motor spokesman did not want to comment on the moped sales.
Demand for mopeds comes from villages and small towns, where it doubles up as a rural activity vehicle priced under Rs 45,000. The reason why mopeds are suddenly back in business, said Crisil Research director Hetal Gandhi, “is because after BS6 (emission norms), the price of mopeds have increased by around 10% — lower than the average hike in other two-wheeler segments”.
What has also helped the spurt is the reverse migration due to the pandemic. “Workers who have moved back to their hometowns owing to Covid-19 have been using their remittance incomes to purchase vehicles like mopeds for transportation and business sustenance needs,” said Gandhi.
“Plus, a bumper rabi output at the start of the fiscal, normal monsoons and high kharif sowing has improved farm sentiments, thereby driving demand for mopeds from rural areas,” she added. Demand growth of mopeds in fiscal 2021 has also been over a low base “as mopeds’ sales had fallen more sharply at around 28% vs 17% fall in scooters and motorcycles,” she said.
The share of mopeds sales in total two-wheelers had been on a decline since the past two decades — from around 10% in FY2000 to about 4% in FY2020. “The increasing adoption of the scooter in the semi-urban and rural markets had led to the moped losing steam over the years,” said Gandhi.