2-wheelers in Odisha hit slowdown bumps, cars on an overdrive!
The price-hike of 2 & 4-wheelers last year had adversely affected the 2-wheeler sales as the lower middle class in Odisha could hardly afford to it. But the nouveau rich has the propensity to drive the cars.
Bhubaneswar: The pinch of the economic slowdown has apparently affected the lower middle class in Odisha. The tale of continuous decline in sales of two-wheelers in comparison to a smart rise in car sales tells all.
The big trend observed is the two-wheeler sales in Odisha that had posted a sharp drop of around 13.6 per cent in 2018-19, have dropped further by over 3.8 per cent in June 2019, revealed the data available with the Odisha Chapter of the Federation of Automobile Dealers Association of India.
In contrast, the car sales in Odisha that saw a decline of over3.8 per cent in the financial year 2018-19, took a re-curve and had accelerated ahead at a pace of 12.45 per cent in June 2019, which is the fourth highest growth in the country.
While the two-wheeler sales in the State averaged at around 64,500 in 2018, the sales have then dropped down to around 55,000 in 2019. In the first half of 2018 (April _September), Odisha had witnessed an average sale of over 67,100 units per month, though the sales dropped a bit in the later half.
However, the average two-wheeler sales in the State during the first five months of the current financial year have dropped to around 54,000 units. The sales in August 2019 has dropped further to around 50,000 units.
Significantly, the two-wheeler sales in the State in 2018-19 had vroomed ahead with a pace of 9 per cent growth over that of 2017-18.
The above analysis crystal clearly shows a subdued demand of two-wheelers this fiscal in Odisha. The reason is attributed to hike in prices across the models along with a rise in cost of third party insurance in September 2018.
But a contrasting picture is witnessed in car sales in the State, especially in June 2019. Though the average units of cars sold in 2018-19 was around 4, 200, and the average has dropped to around 3,800 during the first quarter (April-June) of the financial year 2019-20, the month of June saw sale of around 4,100 units, which is over a 12.4 per cent jump over May 2019.
This overdrive by cars in Odisha looked quite curious as the whole country has posted a record drop in car sales in the month of June. The top gear fact is if the rev up continues, then for the first time Odisha may zoom itself into the top-15 car markets in the country.
At present, with a yearly sale of around 61,000 units, Odisha is far behind a small state like Assam, where the sale figure in 2018-19 had been over 85, 600. In the sale of two-wheelers, Odisha is already among the top-15 states.
Since sales of such private transport vehicles (2-wheelers and cars) hinge on purchasing power of the people, the sales trend hint at a fall in purchasing power of the lower middle class in Odisha.
Significantly, when well-known auto experts blame the fast rise of Ola and Uber cab services along with rising traffic intensity behind the drop in car sales in many big car markets in the country, Odisha car dealers association sports a smile that the trend is not conspicuous in the State as shown by the rise in sale volume.
Experts here feel that the car market in the State has higher potential. But the rise here looks nominal as the personal loans carry higher interest burden courtesy tighter credit policy by RBI till May this year, especially when the prices of cars have increased owing to rise in third party insurance cost and GST.