Honda sold 885,428 Activa units in April to October, up 23%, while Hero sold 832,222 Passion units, a 3.4% increase; Splendor stays No.1
New Delhi: Sales of Honda Motorcycle and Scooter India Pvt. Ltd’s Activa scooters have surpassed Hero MotoCorp Ltd’s Passion motorcycle to become the second-largest selling two-wheeler model in India, as more women choose to buy scooters.
During the April-October period, sales of Honda’s Activa grew 23% to 885,428 units, while sales of Hero’s Passion, grew 3.4% to 832,222 units, according to data provided by Siam.
Hero’s Splendor, however, remained the top-selling model, maintaining a wide lead over the Activa. Hero sold 1.28 million Splendors during the April-October period, even though sales fell 7.22% from a year earlier.
“Scooters are on a roll. It has been the only automotive segment to buck the economic downturn to grow by an impressive 18% (4% for motorcycles),” said Pramod Kumar, senior vice-president, equity research, automobiles and auto ancillaries, at brokerage IDFC Securities Ltd. “Scooters are finding favour with buyers owing to a unisex appeal, increasing female independence, ease of drivability and improved fuel efficiency.” Scooters accounted for 24% of two-wheelers sales in the eight months ended 31 October from 16% in 2009-10. Kumar expects scooters to account for 28% of two-wheeler sales by 2016-17 in India.
Mahantesh Sabarad, deputy head (research), SBICAP Securities Ltd, blamed rising inflation for the poor performance of Passion. “Passion is a mid-segment motorcycle and appeals to semi-urban and rural customers, who look to upgrade from Splendor. But these customers have been hurt in this downturn most due to inflation and hence, have not upgraded their bikes,” Sabarad said. “Activa, on the other hand, is getting customers from different arenas and from both side of the gender.” A Hero MotoCorp spokesperson said his company had good sales this year “thanks to a record festive season”.
“Three of the top-selling five motorcycle brands in the country are Hero brands—Splendor, Passion and HF Deluxe. Indeed, Splendor is the largest-selling two-wheeler brand in the world. What is more—even in the scooter space, our brands—Maestro and Pleasure—are now among the top three brands in the country. We continue to further strengthen our brands,” the spokesperson said.Scooters are no more an urban phenomenon, said Y.S. Guleria, vice-president of sales and marketing at Honda Motorcycle and Scooter India.
With increasing women’s empowerment and better rural road infrastructure, states like UP, Madhya Pradesh, Rajasthan and Bihar have clocked better scooter sales growth, Guleria said. He claimed that the improved mileage on its scooters helped the company negate the impact of rising petrol price in the country. “A 15% increase in mileage took care of the increase in the petrol price as you know this fuel has been deregulated now its rate fluctuates as per the global crude price,” he said.
Honda’s growth in the segment has also been fuelled by the absence of Bajaj Auto Ltd, a brand once known for its scooters, fewer scooter models and supply constraints in Hero’s portfolio. Chennai-based TVS Motor Co. has six offerings in the segment, followed by Honda’s four and Hero’s two.
To be sure, Honda based its India strategy on scooters (at a time when virtually all two-wheeler makers pulled out of the segment citing poor sales) as it was not allowed to sell motorcycles under the joint venture agreement with the then Hero Honda Motors Ltd. Both parties called off the 27-year-old joint venture in December 2010.
Honda still has an order backlog of at least 70,000 units in November, Guleria said.
“This is despite our Bangalore plant becoming operational in July. So from January to November, the backlog has increased,” he said.
Honda is seeing demand coming from smaller cities and with professionals such as teachers, BPO employees and increase in women riders. “I may not have the figures on share of scooters in rural areas until three years ago but in the last two-three years, at least 30% of our scooter sales have come from the rural region,” Guleria said. “With tar roads replacing kuccha (unmetalled) roads, we expect it to grow further.”
New Delhi: Sales of Honda Motorcycle and Scooter India Pvt. Ltd’s Activa scooters have surpassed Hero MotoCorp Ltd’s Passion motorcycle to become the second-largest selling two-wheeler model in India, as more women choose to buy scooters.
During the April-October period, sales of Honda’s Activa grew 23% to 885,428 units, while sales of Hero’s Passion, grew 3.4% to 832,222 units, according to data provided by Siam.
Hero’s Splendor, however, remained the top-selling model, maintaining a wide lead over the Activa. Hero sold 1.28 million Splendors during the April-October period, even though sales fell 7.22% from a year earlier.
“Scooters are on a roll. It has been the only automotive segment to buck the economic downturn to grow by an impressive 18% (4% for motorcycles),” said Pramod Kumar, senior vice-president, equity research, automobiles and auto ancillaries, at brokerage IDFC Securities Ltd. “Scooters are finding favour with buyers owing to a unisex appeal, increasing female independence, ease of drivability and improved fuel efficiency.” Scooters accounted for 24% of two-wheelers sales in the eight months ended 31 October from 16% in 2009-10. Kumar expects scooters to account for 28% of two-wheeler sales by 2016-17 in India.
Mahantesh Sabarad, deputy head (research), SBICAP Securities Ltd, blamed rising inflation for the poor performance of Passion. “Passion is a mid-segment motorcycle and appeals to semi-urban and rural customers, who look to upgrade from Splendor. But these customers have been hurt in this downturn most due to inflation and hence, have not upgraded their bikes,” Sabarad said. “Activa, on the other hand, is getting customers from different arenas and from both side of the gender.” A Hero MotoCorp spokesperson said his company had good sales this year “thanks to a record festive season”.
“Three of the top-selling five motorcycle brands in the country are Hero brands—Splendor, Passion and HF Deluxe. Indeed, Splendor is the largest-selling two-wheeler brand in the world. What is more—even in the scooter space, our brands—Maestro and Pleasure—are now among the top three brands in the country. We continue to further strengthen our brands,” the spokesperson said.Scooters are no more an urban phenomenon, said Y.S. Guleria, vice-president of sales and marketing at Honda Motorcycle and Scooter India.
With increasing women’s empowerment and better rural road infrastructure, states like UP, Madhya Pradesh, Rajasthan and Bihar have clocked better scooter sales growth, Guleria said. He claimed that the improved mileage on its scooters helped the company negate the impact of rising petrol price in the country. “A 15% increase in mileage took care of the increase in the petrol price as you know this fuel has been deregulated now its rate fluctuates as per the global crude price,” he said.
Honda’s growth in the segment has also been fuelled by the absence of Bajaj Auto Ltd, a brand once known for its scooters, fewer scooter models and supply constraints in Hero’s portfolio. Chennai-based TVS Motor Co. has six offerings in the segment, followed by Honda’s four and Hero’s two.
To be sure, Honda based its India strategy on scooters (at a time when virtually all two-wheeler makers pulled out of the segment citing poor sales) as it was not allowed to sell motorcycles under the joint venture agreement with the then Hero Honda Motors Ltd. Both parties called off the 27-year-old joint venture in December 2010.
Honda still has an order backlog of at least 70,000 units in November, Guleria said.
“This is despite our Bangalore plant becoming operational in July. So from January to November, the backlog has increased,” he said.
Honda is seeing demand coming from smaller cities and with professionals such as teachers, BPO employees and increase in women riders. “I may not have the figures on share of scooters in rural areas until three years ago but in the last two-three years, at least 30% of our scooter sales have come from the rural region,” Guleria said. “With tar roads replacing kuccha (unmetalled) roads, we expect it to grow further.”
