The Economic Times daily newspaper is available online now.

    Approving Seventh Pay Commission recommendations to stimulate two-wheeler demand: Yadvinder Singh Guleria, Honda Motorcycle

    Synopsis

    "This is one of the fastest implementation of the recommendation by any Pay Commission only within this six months."

    ET Now


    In an interview to ET Now, Yadvinder Singh Guleria, Honda Motorcycle & Scooters India, shares his views on how the government's approval of the Seventh Pay Commission recommendations will help the two-wheeler market in India. Edited excerpts:

    Unlock Leadership Excellence with a Range of CXO Courses

    Offering CollegeCourseWebsite
    IIM KozhikodeIIMK Chief Product Officer ProgrammeVisit
    Indian School of BusinessISB Chief Technology OfficerVisit
    Indian School of BusinessISB Chief Digital OfficerVisit
    ET Now: What is your understanding of what will happen to two wheeler demand largely because of the Seventh Pay Commission impact?

    Yadvinder Singh Guleria: First off all, the first two months itself have gone good and the industry is already showing a double digit growth. Certain aspects or the attributes like the first was OROP and then followed by this announcement of the implementation of Seventh Pay Commission... this is another important announcement by the government and it will definitely stimulate the two wheeler demand.

    Since a large population of the retired central government employees also live in the rural area and the rural already the forecast of the monsoons are already out and it is very positive that this year is going to be the normal monsoon year for the country and plus on that day the double delight that the Seventh Pay Commission has also been implemented.

    This is one of the fastest implementation of the recommendation by any Pay Commission only within this six months this implementation is happening so that also shows the intention of the government at the centre and definitely it is going to help and support to stimulate the demand in the two wheeler market.

    ET Now: Do you think the impact could be on the similar lines of the Sixth Pay Commission because that time we saw huge surge in consumer demand, what is the kind of magnanimity that you are looking at in terms of an uptick in consumer demand to come in post the Seventh Pay Commission?

    Yadvinder Singh Guleria: I would not say that we can have a Sixth Pay Commission and Seventh Pay Commission apple to apple comparison because the overall economic environment and atmosphere may not be exactly the same but as the indication or as the trend it is always supporting the demand, and it is also increasing the demand of two wheelers in the market because a large chunk of the central government employees comprise of this two wheeler customers.

    Another point is that the timing of this implementation, like there are two things one is the festival is approaching in October and by that time even the arrears will be out and given to the central government employees.

    Second, July and August is also the admission time and all the senior secondary and all the management or other courses where the first time user of two wheeler is coming to the market so this is a time when the parents would like to have their children going on a two wheeler to their colleges and especially after doing well in their exams and getting admission into their preferred college or preferred course.

    The first peak we expect in July-August itself, should help to again get more demand of two wheelers in the market and second time it would be during the festival time. On both the occasions there is higher disposable income in hands of the central government employees as well as the positive monsoons so all of this is going to be a double delight I would say for the two wheeler market.

    ET Now: The other recent moves by the government and the kind of push for GST that we are seeing this time around, is that also bound to have a positive impact on two wheeler sales?

    Yadvinder Singh Guleria: For sure, I think all the makers and all the manufacturers are on the same line because there is going to be a definite benefit to the consumer, it is very difficult to estimate the percentage which would be actually passed on to the consumer, or the consumer is going to benefit out of it.

    ET Now: Within the CC categories 100, 110 and 125, where do you think growth would be the highest? What is your understanding of the new product launches in 2016?

    Yadvinder Singh Guleria: As far as segments are concerned the automatic scooters despite all these announcements like Seventh Pay Commission or the forecast of monsoon the scooters were already showing consistent and sustainable growth over last couple of years. Our take on scooters is that they will continue to drive the two-wheeler demand in the market, and secondly, talking about which engine capacity, primarily the 110 cc is going to continue to dominate the total two wheeler market scenario in terms of volumes.

    There are positive signs of other 125 cc and 150 cc also showing some improvement in overall numbers. In terms of percentage yes it is a little higher than what you see in the 110 cc motorcycle market, because of the base of the segment itself, because we are having a very large base as far as the 110 cc motorcycle market is concerned.

    At the same time, most of the up to 110 cc bikes do sell in the rural area and the rural market. We all know have been depressed or under lot of stress for last two-two and a half years. With positive monsoons, for sure, this will also show a revival in the rural markets.



    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more


    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
    The Economic Times

    Stories you might be interested in