Plunge in bike sales puzzles Andhra Pradesh government

Vijayawada: The state government is in a quandary with sale of motorbikes plummeting by 6.52 per cent in the first half of the 2022-23 financial year in the state when the national average recorded positive growth during the same period.

Andhra Pradesh is the only state in the country that has shown negative growth in this segment, leaving everyone concerned baffled over the situation. Two-wheeler sales grew by 26.05 per cent across the country in the first half of this financial year, compared to the corresponding period last year, official data showed.

AP also registered a negative growth of 1.76 per cent in all categories of vehicle sales in the first half, triggering concern in the government. Chief Minister Y S Jagan Mohan Reddy has taken serious note of the adverse trend and asked the transport department authorities to "create a conducive situation in AP" compared to other states, and push up the sales.

The transport department officials are now engaging the vehicle manufacturers to find out the cause of depressing sales and work out a possible solution to boost growth. The government planned to organise a brainstorming session on October 26 with all vehicle manufacturers on the issue but the scheduled meet got cancelled after the principal secretary (transport) was replaced.

Between April and September 2021, AP sold 3,31,695 motorbikes but the number fell to 3,10,054 during the same period in 2022, marking a 6.52 per cent decline. At the national level, 67,27,806 bikes were sold in the first half of this year, up 26.05 per cent from 53,37,389 last year.

Car sales, on the other hand, also did not show encouraging growth, climbing only 8.27 per cent as against the national average of 21 per cent. "This is the first time that we registered a significant negative growth in two-wheeler segment, and we are also the only state in that regard. This has also led to negative performance in overall vehicle sales," a senior transport department official pointed out.

Neighbouring states like Karnataka and Tamil Nadu have shown robust growth figures of 58.06 and 31.52 per cent, respectively. Vehicle dealers came out with different reasons for the negative trend, particularly in two-wheeler sales.

"A two-wheeler has become a necessity these days but may be the purchasing power has also come down. Almost all bikes are sold on finance (loan) option but somehow we have seen less takers," the regional marketing head of a major bike company pointed out. He, however, said the Dasara and Deepavali festival season in October saw a marginal increase in sales but it might take some more months for the curve to take a positive climb.

Retail dealers came up with an interesting observation that bad roads have been a dissuading factor in the sale/purchase of vehicles, particularly bikes. "Life tax has been increased from nine to 12 per cent this year and petrol price touched Rs 110 a litre. Added to this is the wear and tear caused by bad roads. Our rural sales are largely affected by these factors," M Rajendra, a retail dealer, said.

On two-wheelers costing up to Rs 50,000, the tax rate of nine per cent has not been changed but, on those valued above Rs 50,000, the life tax has been enhanced to 12 per cent to net an additional Rs 163 crore to the government.

Responding to these concerns, a senior transport department official said: "Life tax increase happened after more than 10 years in the state. It is comparatively less than other neighbouring states." Regarding the patchy roads, he said heavy rains in the state this season have left them damaged. "Repairs are being carried out at a cost of over Rs 3,000 crore and the roads will come back to shape in the next three-four months," the official added.

With the government set to increase the quarterly tax on goods and passenger (transport) vehicles that would yield extra revenue of around Rs 200 crore, vehicle dealers are worried that it could lead to a slump in sale of vehicles in that segment as well. (PTI)