One of the largest two-wheeler makers, Honda Motorcycle & Scooters India (HMSI) has raised its concern over industry is entering into a prolonged slowdown and it is likely to witness decline for two consecutive years. However, despite the sluggish market conditions, the company is going ahead with its Rs 2,400-crore investment plan for FY20. This includes setting up of a new manufacturing line in Gujarat.
The rise in the cost of ownership, worsening agri economy and weak salary growth have dented consumer sentiment, which has led to a decline in FY20, HMSI said. The two-wheeler maker is of the opinion that post the implementation of BS-VI, and the resultant price increase in the next financial year, could force the sector to remain in the negative territory in FY21 as well.
HMSI said it will kick off a feasibility study for electric scooters in 2020, despite the fact that the government of India has relaxed the deadline for a complete shift towards electrification of two-wheelers.