Hero MotoCorp has registered a steep decline in demand in November. The company sold 4.79 lakh two-wheelers in the last month as opposed to 5.50 lakh units it had managed in the corresponding period in 2015.
Hero claims that a major chunk of the budget motorcycle purchases in rural areas involve cash transactions. As such, this 12.8 per cent drop in sales in the last month can be attributed to demonetization. Nevertheless, Hero has managed to retain the top spot in Indian two-wheeler industry beating its rival, Honda by 1.28 lakh units.
Overall, the industry witnessed a five per cent drop in demand with Yamaha and Royal Enfield being the only two exceptions. Nevertheless, Hero believes that this is just a temporary setback and an improvement in cash circulation over the next few months should help the numbers get back to normal. The company is also planning to roll out schemes to simplify cashless transactions for purchase of two-wheelers.
