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Full Throttle

Scootering Back

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After having been given up for dead, India's iconic two-wheelers seem to be making a speedy recovery. For the humble scooter - long associated with 1950s Euro-Hollywood glamour, think Gregory Peck romancing Audrey Hepburn in Roman Holiday - 2010 was a special year. It has effectively managed what most thought impossible - a quiet resurrection.

In fact, scooters made every fifth Indian two-wheeler customer (who collectively make up the world's second largest two-wheeler market) reach for their wallet and decide to buy one. But that's not what many would have thought a couple of decades ago though.

Back in the booming 1990s, scooters lost almost their entire market share to motorbikes across India's two-wheeler segments. So much so that even Punebased Bajaj Auto - the segment's pioneer and once the world's largest scooter maker - switched to manufacturing motorcycles only. Yet after years of stagnation the scooter segment is on a surprising path to recovery.

In 2010 the scooter market grew to over a million units per fiscal (April to November), with manufacturers stumbling into a bonanza month during a festive October. Sales doubled to about 1. 88 lakh units and ended up accounting for a whopping 19 per cent of market share.

Ecstatic manufacturers even cattily state that sales could have been much higher, given such thriving, and wholly unexpected, customer demand. Capacity constraints at production plants severely restricted output for them last year, however. Many are now scrambling to ramp up output to meet projected growth this year. For the select few who've gotten their products and pitches right, demand can only be described as booming.

For popular models like Honda's Activa, Suzuki's Access and the Hero Honda Pleasure, customers today face a waiting period of up to three to four months for delivery. In fact it's been the changing taste and fastevolving needs of the Indian customer that has convinced manufacturers to bring back the scooter in a variety of new avatars. This new breed of scooters also appears to have captured the imagination of a new generation. Technology has also contributed greatly. Sporty in performance and almost always fashionably trendy in design now, many scooter models can even compete with motorbikes on mileage and power terms, once unthinkable. Considering that it was those two factors that largely pushed the segment to the brink of oblivion a decade and a half ago, scooters are evidently back with a bang now. Urban India is, rather predictably, fuelling demand. Nuclear families in urban settlements, who apparently greatly prefer the scooter's ease and versatility as compared to the motorbike, are the ones asking for more. Young women are also giving a big thumbs-up to the scooter. With personal mobility and freedom big priorities for them, the light, trendy scooter fits the bill like few other options. Their swelling numbers in many of India's cities are a good augury for manufacturers. Women currently constitute around 10-12 per cent of buyers in India's 10 million-strong twowheeler market - a number, and prospect, that leaves many scooter makers optimistic. Given such growth and projections, market leader Honda Motorcycle and Scooter India (HMSI) is actively looking to increase production. Part of this intent is driven by its current failure to cut months of waiting time on its popular models like Activa and Aviator. Demand spillover from January 2010 onwards complicated matters.

"Despite having doubled our production, we have failed to cut the waiting period and the gap between the supply and demand continues to grow. We are looking at catering to the Indian market with our second plant that will come up in Rajasthan next year, but till then, we will have to cope with the beeline of customers, " says NK Rattan, HMSI operating head (marketing & sales).
Other industry players agree wholeheartedly. "Scooters match the aspirations of the women and teenage customers. Also, these gizmos have evolved as a product and because of their new technology and style, are expected to grow at an impressive rate, " says HDFC Bank senior VP, auto loans, Rajan Pental.

The market has also expanded with the entry of new players like Mahindra & Mahindra, Suzuki Motorcycles India, Global Auto and Yamaha India Motors. Customers can now expect a veritable bonanza of choice with many of these players planning several new product launches.

"We cannot cope with the demand as our single scooter offering, Access 125, currently has a booking backlog of around 50, 000 units. We are planning to launch more scooter models to bridge the gap in this fastest growing segment of the Indian two wheeler market, " says Suzuki VP, marketing & sales, Atul Gupta.

The scooter boom is perhaps best signified by one extraordinary statistic clocked by the world's largest bike manufacturer, Hero Honda. Its Pleasure scooter saw 120 per cent growth in sales after the firm clocked an average sale of 27, 000 units in October (the festive season), as against the 12, 000 of the previous year. "The growth in the scooter segment is being fuelled by several socioeconomic factors including the rising number of working women, the spread of smaller and satellite towns, and the overall economic growth in the country that is expected to sustain for the next few years, " says Anil Dua, Hero Honda senior VP, marketing, with an eye on an evidently rosy future.

Reader's opinion (1)

Suresh BalaJan 24th, 2011 at 14:04 PM

Article is well presented which highlights the current trends. TVS who have a good portfolio of Scotty & WEGO is no where mentioned.Yamaha who is eyeing the segment will also be a hot contender in this segment.

 
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