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Scooters are back: Activa tops two-wheeler sales

business Updated: Oct 26, 2013 07:34 IST
Sumant Banerji
Honda Activa

For the first time in well over a decade, a scooter has pipped all motorcycles in India to emerge the largest selling two-wheeler in a month. Reason: rapid urbanisation, and more women riders.

The Honda Activa found almost 142,000 takers in September easily surpassing the country's long standing bestseller, Hero Splendor, which sold 124,217 units during the month.

In the first six months of this fiscal, sales of the Splendor have declined by 15.5% to a little over 900,000 units. The Activa, which has a 43% share in the scooter segment, saw sales grow by 17% to 718,888 units in the same period.

"Most of Activa's customers are from urban- or semi-urban pockets and rural areas account for only 20% of its sales," said YS Guleria, vice-president, sales and marketing, Honda Motorcycles and Scooters India (HMSI). "Its demand has always been strong and it has bucked the industry trend of slowdown. At the start of the year, it has a backlog of 50,000 units. Today that is more than 100,000, with a waiting period of three weeks."

Is this a flash in the pan? Not quite. Scooters have been witnessing robust growth over the last couple of years thanks to growing demand in urban centres even as motorcycles have found the going tough.

In the first half of this fiscal year, scooter sales grew by 16.6%, against the stagnating motorcycle segment, where sales grew just 0.88%. The Splendor's decline is a symptom of this malaise.

"In the last 4 years, scooter sales have grown at 26% as compared to 14.7% for motorcycles. This trend is likely to continue in the coming years," said Rakesh Batra, partner and national leader automotive practice, Ernst & Young.

"Scooter is a predominantly urban vehicle and women are a significant chunk of users. As urbanisation picks up and women exert their independence, sales would grow. Also many men in the 30-plus age group are now also looking at scooters."

At over 10 million units per annum, India's motorcycle market is over three times the size of scooters. But while sales of motorcycles, with their bigger base, have stagnated, scooters have been growing in high double-digits.

Not surprisingly, traditionally strong motorcycle manufacturers are making a beeline for scooters. Except Bajaj, every other two-wheeler maker - Hero MotoCorp, Honda, Yamaha, Suzuki, TVS, Vespa and Mahindra - is present in the scooter segment.