With large number of female drivers and variety of options available in gear-less vehicles, scooter is on its way back in India. The common man's vehicle had been rejected since quite a long time, after Bajaj Auto Limited, the auto major which revolutionised the country with Bajaj Chetak, decided to stop producing scooters in December 2009. The course of the market since last 6 years shows that the sales of scooters are again flowing in, even though Bajaj continue focussing on motorcycles.
In FY 2011-12, the motorcycle segment skidded to 75.1 per cent from 83.5 per cent in 2006-07. As per the recent report of Investment Information and Credit rating Agency (ICRA), lower Compound Annual Growth rate (CAGR) of 9 per cent in last 5 years nipped the motorcycle shares. This figure was very low compared to 22 per cent and 17 per cent for scooters and mopeds respectively. Society of Indian Auto-mobile Manufacturers (Siam) reported that from November 2011-April 2012, motorcycle segment witnessed sales of 5,053,200 units to mark a growth of 9 per cent against the same period last year. On the contrary, 13,95,401 units of scooters were sold in the same period to report a growth of 29 per cent.
The gross sales volumes of the two-wheeler industry were trimmed by the slow growth rate of motorcycles, which comprises 72 per cent of the total market. The scooters segment is expected to grow from 19.1 per cent in 2011-12 to 27 per cent by 2016-17 in the domestic circuit as per ICRA. This would double the sales volumes of the humble means of transportation in domestic market.
Honda Motorcycle and Scooter India Pvt. Ltd as well as Hero MotoCorp and Suzuki Motorcycle India has increased their scooter capacities, after realising the unexploited opportunities in this segment. National Business Head, Sales and Marketing, India Yamaha, Roy Kurian, said that with its Ray brand of gear-less scooters, Yamaha Motor Private Limited too will enter this segment. The Japanese manufacturer is planning to launch the Ray series during Diwali in the country this year. According to Kurian in next two years, scooter segment will mark a growth of 35 per cent in the Indian two-wheeler market.
In an attempt to increase the capacity at its Faridabad plant in Haryana to a million unit by 2014, Yamaha has planned an investment worth Rs. 750 crore. On the other hand, Honda has also been increasing the capacities at its plants. The company has set benchmark by introducing Activa, the first gear-less scooter, which is the beginning of a new segment. Other manufacturers are also constantly trying to make their presence. Hero MotoCorp, with Pleasure and Maestro brand of scooters in its portfolio is capable of producing 50,000 vehicles every month.
On the other hand, Senior Vice President, Sales and Marketing, Suzuki Motorcycle, Atul Gupta feels that the last five year's growth is approaching its end and will not exceed 23-24 per cent share in the market. Suzuki sells 30,000 units of its Access brand of scooters on a yearly basis. SIAM too feels that in the month of May the industry would not touch the double digit growth as its Director-General, Vishnu Mathur says, “With whatever conversations we are having with companies so far, it seems two-wheeler sales are going to be flat this month.”
