Fancy your scooter over your car in chock-a-block traffic? Do you love vrooming to college on your sports bike? Or does a weekend invariably mean a quick trip on your Bullet to the nearest hill station? If you answered yes to any or all of these questions, you’re not alone. Scooters are selling like hot cakes these days and the number of adventure lovers is increasing by the minute, aiding the sale of sports and super bikes. Even those who use bikes to commute no longer seem satisfied with a basic model; they are upgrading to bikes with more bells and whistles.
Rise in scooter sales
Scooter sales are racing ahead, at 17.3 per cent so far this fiscal (over the same period last year), even as motorcycle sales volumes have grown by 7.7 per cent. Volume growth has maintained this trend for more than five years now. Thanks to this, from about 20 per cent five years ago, the share of scooters in total two-wheeler sales has now moved up to 34 per cent. Crowded traffic conditions, poor public transport, increasing number of women drivers, style and unisex appeal have been some of the demand drivers for gearless scooters, which form the bulk of the market in India.
With scooters proving to be a good counter to the cyclical nature of the rest of the auto industry including motorcycles, almost all two-wheeler manufacturers, barring Bajaj Auto, have cashed in on this trend. Hero, Honda and TVS have traditionally been the big players in this segment. Yamaha (Ray, Alpha, Fascino) and Piaggio (Vespa, Aprilia ) entered in 2012-13.
However, thanks to the onslaught from Honda (Activa, Dio, Aviator), players such as Piaggio, Suzuki and Hero MotoCorp (Pleasure, Maestro Edge, Duet) have seen their market shares decline in the last five years. Hero’s market share in scooters has come down steadily to about 12 per cent from 19 per cent five years ago. In the same period, Honda’s market share has improved by at least 10 percentage points to 59 per cent.
While TVS too faced the heat from Honda initially, in the last three to four years, the company has shifted into higher gear, with the launch of the Jupiter and Zest in the 90-125cc segment.
Consumers want more
Within motorcycles, higher disposable incomes and increasing purchasing power have seen consumers shift to bikes with more ride comfort and engine power in the last five years. Thus, the 75-110 cc category of bikes, typically considered the entry segment, has seen its share in total motorcycle sales decline to 58 per cent now, from 64 per cent five years ago. Part of this decline can be attributed to cannibalisation by scooters as well.
Yamaha has exited the entry segment and Bajaj Auto (Boxer, CT, Platina, Discover) has seen erosion in market share. Honda (Dream Yuga, Livo) and TVS (Max 4R, Victor, Jive, Star City), too, have been on somewhat shaky ground.
Hero MotoCorp (Dawn, Deluxe, Splendor, Passion) is the only exception. While its market share in this segment did take a beating in 2013-14 (down three percentage points over the previous year to 66 per cent), it has improved since then to 75 per cent now. Its strong foothold in the more price-sensitive rural markets has helped the company do well so far. Yet, headwinds remain in the form of competition from scooters and the willingness of consumers to upgrade to higher segment bikes.
While interest in the entry segment has waned, it has grown in the mid-segment, especially in 150-200 cc bikes. With TVS’s Apache doing well in this category, Honda and Suzuki launched similar products in the last three to four years, sensing the shifting customer interest. Thus, Honda’s CB Unicorn 160, CB Hornet 160 and Suzuki’s Gixxer have met with success in this segment.
The interest in bikes with higher engine capacity goes to show that customers are now willing to shell out more for the superior feel and ride experience rather than just settle for plain Jane bikes.
Premium bikes to the fore
A third trend coming out of motorcycle sales patterns is the growing interest in bikes with engine capacity over 250 cc, considered a premium segment. Higher disposable incomes, availability of finance from banks specifically for purchase of such super bikes as well as a spirit of adventure among buyers are driving the demand for these bikes.
From less than 1 per cent five years ago, bikes above 250 cc now command a little over 6 per cent share in total sales. Royal Enfield has been a big gainer from this new-found interest for premium bikes among customers. Its Bullet/Classic 350 and Bullet/Classic 500 have been popular choices in the 250-500 cc segment.
Taking note of the growing interest, Kawasaki (Ninja 300), Yamaha (R3) Mahindra (Mojo), Bajaj (Dominar 400) are the other players that have entered this segment in the last five years.
TVS has already begun export of bikes in the 250-350cc category from its partnership with BMW. These bikes are expected to be made available for the domestic market soon. Besides, Bajaj Auto recently entered into a partnership with the premium brand Triumph, from which sub-500 cc bikes are expected to be rolled out for emerging markets.
International players with niche offerings much above 500 cc are also trying to cash in on the growing interest in superbikes. Harley-Davidson has set up a plant at Haryana for some of its bikes. Others are setting up assembly units in India to reduce the costs, as import of fully built bikes can be more expensive. Triumph, for instance, assembles its CKD imports at its plant at Haryana while Benelli’s CKD imports are assembled in Maharashtra.