Scooters have defied a slowdown in the Indian market. One of the smallest segments in two wheelers, its robust growth has given a fresh impetus to twowheeler companies.
Scooter sales in the domestic market grew 21% in the first six months of the fiscal even as motorcycles declined 0.79%.
The strong demand, boosted by the growing urban infrastructure and rising number of women owning scooters, has encouraged companies to hike capacities to tap this growth which has been rare across the Indian automotive market.
“We are adding 10,000 scooters to take our monthly capacity to 40,000 by March next year. We have seen consistent expansion in the past two years where demand has simply outstripped out capacities,” says Atul Gupta, marketing head, Suzuki Motorcycle Private. Companies have lined up an investment of . 500-600 crore this year to take the cumulative scooter production beyond the 30-lakh mark due to a backlog of order bookings. According to scooter manufacturers, while most bikes are currently available off the shelf, scooter models command a two-to-four months of waiting in selective markets.
Leading the way is Honda Motors that is credited for reviving the scooter market in India with its Activa way back in 2001 — even as erstwhile market leader like Bajaj Auto’s presence in scooters gradually faded — is now returning to the segment with some fresh plans to rejuvenate its presence in the scooter segment.
Its Indian subsidiary HMSI is working on plans to develop high-power scooters besides strong focus by refreshing its flagship brands like 110-cc Activa and Dio to maintain its lead. “We changed the perception about scooters in India. Our current range of automatic scooters enjoys tremendous consumer confidence as a complete family vehicle with delivering high-fuel efficiency without compromising styling. With a consistently expanding demand we expect to cater to the Indian demand as we gradually ramp up production in our third plant coming in Karnataka next year,” said YS Guleria. Vice-president (sales & marketing) HMSI.
Two-wheeler companies are most bullish on the scooter potential in the Indian market and is expected to grow from the current 20% to 35% by 2016, when the Indian two-wheeler market is expected to double to 20 million units. Scooters have caught the fancy of new age customers. Besides, the growing base of women customer’s, scooters with automatic transmission and multi-purpose use are generating stronger demand in smaller places. “Scooter sales are spread across states or hinterland markets. While demand is higher in urban areas, the semi-rural markets are also spurring growth in recent times,” Guleria added.
Hero MotoCorp enjoys the second-biggest chunk of the scooter market, following the success of its newly-launched Maestro. The company, which has a full-year capex of . 350 crore for its entire operations this year, has planned to hike its monthly production to over 60,000 units at its Gurgaon plant.
“Even as bike sales have slowed, scooters are keeping us busy and generating a huge latent demand to keep our expansion plans intact. With an average sales crossing 50,000 units last month, we are scaling up our scooter capacity to over 60,000 units a month from about 40,000 units about a year back,” said Anil Dua, senior vice-president (marketing & sales) HMCL, said at an analyst call last week.
The demand, which stayed ahead of production in the past two years, has promoted new players like India Yamaha Motor, Italian Piaggio and Global Auto to foray into the segment. “We are looking at an overall market share of 10-15% market in the scooter segment by 2016 with the success of the RAY scooter which is targeting young urban women,” said Jun Nakata, director (sales & marketing) India, Yamaha Motor.
