They are light, stylish, unisex, multiple usage, and they bucked the slowdown. The ever-so-convenient scooters are now the darling of the two-wheeler industry. And, increasingly, they are replacing motorcycles on urban roads.
The scooter success story in India has seen some hairpin bends going from nearly 50% of the market in 1996 to just 12% around 10 years later. Now, less than a decade on, scooters comprise 28% of the two-wheeler market and every manufacturer in the fray is looking for niches to plug with their scooter launches. Auto industry experts say the city-hinterland divide between scooters and motorcycles is one of the reasons for their growth difference. The motorcycle's dominance over all roads, urban and rural, is clearly over.
TVS Motor chairman Venu Srinivasan said: "We have already started to see big cities favouring the scooter. While motorcycles will continue to grow, it will become a bigger semi-urban mode of transport." The scooter's popularity in bigger cities and in states like Maharashtra, Gujarat and Karnataka has to do with product USP and appeal. A multiple usage product, it is favoured by both men and women and it is in states that have a larger percentage of working women, better roads and higher social indices that scooters ers typically do well.
Y S Guleria, V-P-sales and marketing, Honda Motorcycle & Scooter India (HMSI), said, "Scooters depend on markets with better literacy, awareness and infrastructure. That's why it's a predominantly urban product but in the future, the contribution of rural markets will improve and we are looking at the scooter's urban skew as potential to improve rural contribution."
Guleria should know. HMSI, with nearly 2 million units in sales in FY14, is the clear leader in the scooter market. Its Activa is the second largest selling product in the two-wheeler mart, higher than Hero's long-standing best-seller Passion and second to its stablemate Splendor. Currently, 53% of HMSI's sales are scooters while 47% comes from motorcycles. Part of the urban skew in scooter has to do with the way its demand curve revived when HMSI introduced the Activa.
"We began with just 50-60 dealers and they were naturally focused on urban markets," said Guleria. "But now we have 800 dealers we are pushing forward into tier-2, tier-3 cities as well as rural markets. As accessibility improves, so will brand visibility and demand from rural markets."
Of course, it will take some time for rural India to come up with the kind of numbers that scooters now tot up in cities. "At present, scooters are 75-80% urban and 25-20% rural sales," said Atul Gupta, V-P-sales and marketing, Suzuki Motorcycle India. "The success of scooters is now a 10-year-old phenomenon so the penetration levels are slowly moving into semi urban and rural markets as well." Suzuki launched its 110 cc scooter Let's earlier this week - among a clutch of launches planned by nearly every two-wheeler manufacturer in the segment. "The scooter market saw 12-13% growth last fiscal but this year it will slow down a bit to around 7-8%. "We are looking to sell around 10,000 units of the Let's per month to start with," said Gupta. "Currently 70% of our total sales are scooters and 30% motorcycles."
Part of the allure of the scooter, say industry experts, is that it is a multiple or co-usage product. Both women and men in the family can share the vehicle and it is lightweight, fuel efficient and easy enough to drive around. "Scooter sales took off when the new range of scooters offered features, technology and mileage like the 110 cc commuter bikes," said Gupta. "But penetration levels in major urban markets are gradually going up so it's just a matter of time before marketers look to rural India for incremental growth."
The scooter success story in India has seen some hairpin bends going from nearly 50% of the market in 1996 to just 12% around 10 years later. Now, less than a decade on, scooters comprise 28% of the two-wheeler market and every manufacturer in the fray is looking for niches to plug with their scooter launches. Auto industry experts say the city-hinterland divide between scooters and motorcycles is one of the reasons for their growth difference. The motorcycle's dominance over all roads, urban and rural, is clearly over.
TVS Motor chairman Venu Srinivasan said: "We have already started to see big cities favouring the scooter. While motorcycles will continue to grow, it will become a bigger semi-urban mode of transport." The scooter's popularity in bigger cities and in states like Maharashtra, Gujarat and Karnataka has to do with product USP and appeal. A multiple usage product, it is favoured by both men and women and it is in states that have a larger percentage of working women, better roads and higher social indices that scooters ers typically do well.
Y S Guleria, V-P-sales and marketing, Honda Motorcycle & Scooter India (HMSI), said, "Scooters depend on markets with better literacy, awareness and infrastructure. That's why it's a predominantly urban product but in the future, the contribution of rural markets will improve and we are looking at the scooter's urban skew as potential to improve rural contribution."
Guleria should know. HMSI, with nearly 2 million units in sales in FY14, is the clear leader in the scooter market. Its Activa is the second largest selling product in the two-wheeler mart, higher than Hero's long-standing best-seller Passion and second to its stablemate Splendor. Currently, 53% of HMSI's sales are scooters while 47% comes from motorcycles. Part of the urban skew in scooter has to do with the way its demand curve revived when HMSI introduced the Activa.
"We began with just 50-60 dealers and they were naturally focused on urban markets," said Guleria. "But now we have 800 dealers we are pushing forward into tier-2, tier-3 cities as well as rural markets. As accessibility improves, so will brand visibility and demand from rural markets."
Of course, it will take some time for rural India to come up with the kind of numbers that scooters now tot up in cities. "At present, scooters are 75-80% urban and 25-20% rural sales," said Atul Gupta, V-P-sales and marketing, Suzuki Motorcycle India. "The success of scooters is now a 10-year-old phenomenon so the penetration levels are slowly moving into semi urban and rural markets as well." Suzuki launched its 110 cc scooter Let's earlier this week - among a clutch of launches planned by nearly every two-wheeler manufacturer in the segment. "The scooter market saw 12-13% growth last fiscal but this year it will slow down a bit to around 7-8%. "We are looking to sell around 10,000 units of the Let's per month to start with," said Gupta. "Currently 70% of our total sales are scooters and 30% motorcycles."
Part of the allure of the scooter, say industry experts, is that it is a multiple or co-usage product. Both women and men in the family can share the vehicle and it is lightweight, fuel efficient and easy enough to drive around. "Scooter sales took off when the new range of scooters offered features, technology and mileage like the 110 cc commuter bikes," said Gupta. "But penetration levels in major urban markets are gradually going up so it's just a matter of time before marketers look to rural India for incremental growth."
