Bajaj Auto touched its 52-week high of Rs 7,499 on January 25, 2024 and has gained 10% over the past one month. TVS Motor Company’s stock price currently at Rs 2000 levels is near its 52-week high. And Hero MotoCorp made a new 52-week high today as the street expects good December Quarter 2023 results to be declared tomorrow. Eicher Motors stock price on the other hand has gained 38% from its 52-week low of Rs 2,836 struck last year and is almost flat over the past one month. Investor sentiment seems to be subdued for Eicher Motors compared to other three two-wheeler manufacturers. Bajaj Auto and TVS Motors came in with robust Q3FY24 numbers. Revenue grew 30% YoY and 25% YoY for Bajaj Auto and TVS Motor Company respectively in Q3FY24. And Hero MotoCorp is also expected to do the same. The street gets a whiff of it, from the wholesale volume numbers declared by the two-wheeler manufacturers at the beginning of every month.
Domestic Volumes Support Bajaj Auto And TVS Motor Volume Growth
In quarterly terms, TVS Motors tops the wholesale volume growth meter in Q3FY24 followed by Bajaj Auto and Hero MotoCorp. TVS Motors reported 27% YoY wholesale volume growth in Q3FY24. Bajaj Auto and Hero MotoCorp delivered wholesale volume growth of 22% YoY and 18% YoY respectively in December Quarter 2023. Eicher Motors reported wholesale volume growth of just 3% YoY in Q3FY24. Strong volume growth is supported by robust domestic business for all three original equipment manufacturers (OEMs) as exports are impacted by currency devaluations, high inflation and weak demand in African and LATAM countries. Bajaj Auto reported domestic revenue growth of 50% YoY in Q3FY24. For TVS Motor Company domestic volumes grew 33% YoY to eight lakh units in Q3FY24. And strong double-digit volume growth continued in January 2024 too for the top two-wheeler tier in listed space except Eicher Motors.
Eicher Motors On The Backfoot, competition bites
Eicher Motors stock price had fallen 10% in a span of 5-6 days after Hero MotoCorp and Harley Davidson announced launch of its X440 premium bike followed by Bajaj Auto-Triumph motorcycles launch in July 2023. Speaking on competition in the post Q2FY24 results conference call, Siddhartha Lal, Managing Director and Chief Executive Officer at Eicher Motors said, “At best we see that if there is a couple of competitive bikes that are not as shabby as they have been previously, then maybe they’ll help us grow the market. And we are a 90% player in this 350 cc plus market.” Eicher Motors, makers of Royal Enfield motorcycles has popular brands Hunter, Classic, Bullet and Himalayan 450 in 350+ cc category and is facing tough competition from X440, Triumph Speed 400, Honda CB350, Jawa 42, Scrambler 400X to name a few.
Though management optimism seems to be quite high, Eicher Motors domestic volumes are impacted as Triumph and Harley Davidson are making inroads in its highly fortified 350+ cc category visible from the low retail volume growth.
Royal Enfield Electric Motorcycle In the Works
Speaking on Triumph success, Rakesh Sharma, Executive Director at Bajaj Auto said, “On Triumph, we delivered about 15,000 units this quarter, give, or take. Of which, about 8,000 was domestic and the rest of it went off to the export markets.” Harley Davidson X440 is also gaining market share as monthly volumes increased from 2000 units in October 2023 to 4000 units in December 2023. TVS Motors is also going to launch its super premium TVS Norton Motorcycles in the near future.
Unlike its close peers, Eicher Motors does not have scooters, both ICE and electric in its product mix to support volumes. Bajaj Auto’s electric scooter, Chetak’s market share in electric scooter market increased to 14% in December 2023 from a mere 4% in FY23. In Q3FY24, Bajaj Auto sold 10,000 units per month and aims to touch 15,000 units per month mark in Q4FY24. TVS Motor Company with its popular brand TVSiQube and recently launched TVS X together sold 49 lakh units in Q3FY24, up 66% YoY. Hero MotoCorp’s electric scooter Vida is still in initial stages selling nearly 1000 units per month. At the EICMA show, Royal Enfield unveiled a special project, known as the ‘Electric Himalayan Testbed’. The company normally takes 3-4 years for product manufacturing. According to the Eicher Motors management, a disruptive e-motorcycle is in the works. But the gestation period is too long, the disruptor is already disrupted. Eicher Motors is coming out with its Q3FY24 results on February 13, 2024. Hopefully the management commentary should be positive.
