Honda Activa, Hero Splendor, Bajaj Pulsar prices to fall?

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Two-wheeler scooters like Honda Activa, Suzuki Access, TVS NTORQ and motorcycles like Hero Splendor, Honda Shine, Bajaj Pulsar, etc could become cheaper, if the Federation of Automobile Dealers Association (FADA) has its way.

FADA president Manish Raj Singhania has called on the government to reduce GST on entry level two-wheelers (2Ws) from 28 per cent to 18 per cent so that manufacturers can reduce prices. This would make the segment affordable and help push up sales.

Share of entry-level motorcycles down 60 per cent in last four years 2Ws with up to 125 cc fall under the entry-level segment. The share of entry-level motorcycles in total 2W sale has fallen 60 per cent in this four-year period from FY19 to FY23.

Two-wheeler sales still below pre-Covid levels In FY23, the nation saw sale of 1.59 crore units of 2Ws. While, before Covid-19 pandemic, India had clocked total 2W sale of 1.95 crore in FY19.

On 2W sale in the country, Singhania said, “We are still 20 per cent behind the pre-COVID levels.”

Fall in total 2W sale from FY19 to FY23:

The fact that two-wheeler sales couldn’t scale back to pre Covid-19 levels even after four years of pandemic, only speaks volumes that rural demand has not recovered fully.

Prices of entry-level two-wheelers have gone up by 50 per cent in the past three years Plus, there is not much hope that income levels will rise anytime soon in rural India. So, the only way to help pull up 2w sale is to make the segment less costlier and affordable. In the current scenario of elevated prices of input , which are used in 2w manufacturing, slashing GST is the only way two wheelers could be made cheaper.

Currently, GoI, levies 28 per cent GST on two-wheelers and four-wheelers. While, EVs including E2Ws fall under the 5 per cent GST bracket.