The scooter market of the automobile industry is on a roll. This is the only segment that remains unaffected by the gloom that has engulfed the entire automotive industry. Scooter volumes continue to grow in strong double digit. Growth for automatic scooters has accelerated over the past few years, with 26 per cent compounded annual growth rate in volume terms. In FY14, barring bikes, all segments of the auto industry reported negative growth. But scooter volumes grew by 23 per cent (at 3.6 million units), while bike sales were up four per cent (at 10.48 million units).

Fatigue-less riding

Japanese firm Honda led the new evolution of scooters in India with the launch of its all metal body automatic scooter Activa more than a decade ago. For city riding conditions where heavy traffic with a lot of stop & go commuting, automatic trans- mission becomes handy by providing convenient ride with no fatigue of gear shifting. With self-start option and ease in driving, these automatic scooters have been a big hit among both male and female and young old.

Scooter volumes have been driven largely by working women, college girls as well as senior citizens. However, increasing acceptance of such automatic scooters among men has also been a key driver for volume expansion. Y S Guleria, Vice President — Sales & Marketing, Honda Motorcycle & Scooters India, pointed out that now with advancement in technology, the mileage gap between scooters and bikes has also reduced significantly. “Increased urbanisation will drive more demand from males looking for a convenient personal mode of commuting yet being lighter on their overall ownership cost,” he added. Presently, about 90 per cent of scooter volumes are in the urban centres. According to experts, scooter segment would enjoy some structural advantages to sustain growth. Compared to bikes (targeted at males), the penetration of scooters (targeted at both males and females) remains lower by a factor of 3-4 times. As more women adopt mobile lifestyles and as scooters get increasingly targeted at both the sexes, the case for growth remains strong.

Honda, the leader

Scooter volumes are expected to grow at about 20 per cent CAGR over FY14-20, twice the growth rate for motorcycles. The share of scooters is expected to grow to 36 per cent by 2020, with annual volumes of 10.5m units.

Presently Japanese wave is sweeping across the scooter market. Despite increased competition, Activa remains the largest selling automatic scooter and Honda continues to lead the scooter market. Suzuki has drawn up an aggressive growth plan under which it seeks to launch at least two new scooters a year.

Hit by Japanese storm, Indian companies such as Hero and TVS are banking on new product launches in a bid to protect their turf. Presently, Hero occupies the second position, followed by TVS Motor, Suzuki and others.