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Honda Activa overtakes Hero Splendor

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  • November 5, 2013
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The Honda Activa has overtaken the Hero MotoCorp Splendor as the largest selling two wheeler in the country. We give you a brief run through of what lies ahead

 

Honda Activa

 

 

Scooters are not only the fastest growing segment of the Indian automotive market, but are increasingly taking on their most-erstwhile rival - bikes, as the gearless vehicles gain favor here. Increasing urbanization and female buyers have given a fillip to the sale of scooters across India. Honda Activa displaced the two-decade-old market leader Hero's Splendor motorcycle from the top slot in September. Scooters already outsell bikes in many significant markets like Chandigarh, Imphal, Goa and Kerala. Robust growth over the years has also helped scooters bridge the sales gap with bikes in other major markets like Delhi, Mumbai, Chennai and Pune with more customers vying for this convenient mobility. Scooter sales have clocked a growth rate of 26% in the past four years, compared with 15% for motorcycles, aided by better urban infrastructure and popularity among women - who constitute 40% of first-time buyers. The shift is a goldmine for scooter companies.

 

 

Hero Splendor NXG

 

 

Segment leader Honda, that has been credited with reviving India's scooter market over a decade ago, says sales are strongly correlated to development and education. "First it was Chandigarh - a hub of education in the north - where scooter gained prominence. And then in South India, Kerala - India's most literate state - became the first state where scooters outsold bikes. Our data show that Gujarat is now emerging as a major hub where scooters are narrowing the gap with motorcycles pretty fast," says Honda's vice-president (marketing & sales) YS Guleria. While bikes still constitute 70% of the total two-wheeler market, the nondescript scooter has risen from oblivion and comprises 24% of the 14-million-unit, two wheeler market.  Also Read: Honda Activa Road Test

 

 

 

Scooter sales figure chart

Pic courtesy: ET

 

 

Scooter manufacturers are targeting women, who form a significant chunk of their new customers. "Scooters find multiple uses in urban households compared to motorcycles, which are more suited for men. The emergence of scooters as the preferred mode of personal transport is in step with the transformation of the country's demographic profile - women are becoming increasingly empowered and income levels in semi-urban and rural areas are on the rise," says Anil Dua, senior vice-president (marketing & sales) Hero MotoCorp, that commands the second position in the scooter market with the Pleasure and Maestro models. India's bike market is over three times the size of scooters. Though motorcycles continue to form a bigger chunk of sales, at over 10 million units per annum, sales have stagnated over the past few years. Scooters, on the other hand, have registered high double-digit growth. In the first half of this fiscal, bike sales grew marginally by 1% to 50.1 lakh units, while Scooters vroomed 17% to reach 16.6 lakh units in the same period.

 

 

Bajaj Discover 125T

 

 

 

 

Bajaj Sticks to Bikes

The original pioneer of scooters in India, Bajaj Auto exited the segment a few years ago and has no regrets. The company prefers to stick to its all-bikes strategy. The company's managing director Rajiv Bajaj told ET that each two-wheeler company has its own different strategy. "In two wheelers, some companies make mopeds and scooterettes and motorcycles and scooters but they don't make much money. We make just motorcycles. Because when you make just one thing, chances are that you make it better than anyone else," he said.

 

With demand for scooters growing in rural and urban India, every two-wheeler manufacturer - with the exception of Bajaj - including Honda, Hero MotoCorp, Yamaha, Suzuki, TVS, Mahindra & Vespa, is vying to tap the demand. About 20-25% of two-wheelers sold in non-urban smaller markets are scooters and the share is rising gradually. In the slowing market, models such as Honda Activa and Hero Maestro are perhaps the few brands that command some kind of waiting period signaling a strong pull and companies launching new products to feed demand. "We have been consistently increasing the production capacity for scooters, as we were not able to feed the market demand. We also launched a second scooter; Swish to cater to the fast growing market" said Atul Gupta, VP (marketing & sales) at Suzuki Motorcycles India.