Farm loan waiver to boost two-wheeler sales

For several months the sales of two-wheelers have dwindled due to slowing of demand. Further Tata's small car Nano threatens to choke the demand of two-wheeler sales.

Motorcycle producers are convinced that the farm loan waiver announced in the recent budget, will improve rural disposable incomes and boost the sagging sales.

According to a Hero Honda executive, the farm loan waiver means more buying power in the hands of people in the rural sector. This is likely to fuel demand for two-wheelers in these markets. The excise duty cut on two-wheelers and the consequent reduction in prices of all of their models are also likely to have a positive impact on their sales.

At present, almost half of motorcycle sales in the country happen in rural markets. The package could clearly spell a bonanza for these sectors.