Local ABS suppliers lack sufficient capacity: HMSI

The government's decision to mandate anti-lock braking systems (ABS) for all two-wheelers from January 1 next year has raised concern across the industry due to a limited local-supplier capacity, says Yogesh Mathur, director (sales & marketing), Honda Motorcycle & Scooter India (HMSI), in an email interview with Deepak Patel. He says demand for two-wheelers is expected to remain weak until the festival season begins, and the industry is watching negotiations between India and China on rare-earth minerals, essential for electric vehicles. Edited excerpts:

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The two-wheeler industry's performance was tepid (a 6.2 per cent year-on-year drop) in the first quarter of 2025-26. Can you explain what is going on in the market?

Despite gross domestic product (GDP) growth being in the 6-6.5 per cent range, the monsoon being good, interest rates low, inflation rates being much lower, it looks like real cash in the hands of the people is not there. Real GDP (growth) does not look like 6.5 per cent, which we are currently seeing. Recently, there has been an announcement on the cash reserve ratio (CRR). (On June 6, the Reserve Bank of India cut the CRR by 100 basis points in a phased manner to inject 2.5 trillion into the banking system.) So, hopefully, by this festival season, it looks like this entire fund will be available with banks to pump into the market. Till then, it looks like the growth trend (of the two-wheeler) industry will remain the same as before.

The customers are not spending?

No. Overall sentiment is not really positive globally and in India. People are still resisting spending the way they used to earlier. They are waiting for an appropriate time to buy, when sentiment is positive globally and in India.

What will be your growth forecast for the two-wheeler industry for FY26?