The scooter market, not too long ago the darling of the two-wheeler industry, has not been spared the trials and tribulations of a sales slowdown. In July 2019, the segment saw total dispatches of 5,26,504 units (-12.10 percent) and in the April-July 2019 period, a total of 2,040,706 units (-15.58 percent). Its overall share of the two-wheeler market remains a good 31 percent though.
Honda Motorcycle & Scooter India (HMSI) remains the unassailable scooter market leader due to the powerful brand presence of the Activa, but the fact of the matter is that its sales are slowing sharply. In the first four months of FY2020, HMSI sold a total of 11,48,794 units, down 21.18 percent (April-July 2018: 14,57,537). In the process, its scooter market share has reduced by about 4 percent to 56.29 percent from 60.30 percent in April-July 2018.
In the opening month of FY2020, Honda's best-seller sold 2,10,961 units, a far cry from the year-ago sales (April 2018: 3,39,878) and down 38 percent year-on-year. In May 2019, it saw 2,18,734 units go out to showrooms, down 19.7 percent (May 2018: 272,475) and in June 2019, a total of 2,18,734 scooters were sold, down 19.72 percent (June 2018: 272,475). Clearly, the ball is in the Honda's court to do something quickly to arrest the fall in the Activa's sales.
But HMSI is aggressively working on new growth strategies, and is targeting semi-urban and rural India to drive up sales. Earlier this year, it tied up with Cholamandalam Investment & Finance Co for offering retail finance. Cholamandalam’s strong nationwide presence with over 1,000 branches, most of them rural and semi-urban areas, and a base of a million consumers should help.
Another sizeable market share drop is with Hero MotoCorp, which sees its share drop to 7.59 percent from 10.02 percent a year ago. The company sold a total of 1,54,922 units in April-July 2019, which marks a sharp YoY decline of 36 percent.
Hero MotoCorp is looking to cash in on the growing demand for 125cc scooters. In May this year, the company launched the Maestro Edge 125 in three variants – a carburettor drum brake variant priced at Rs 58,500, a carburettor disc brake variant at Rs 60,000 and a fuel-injected variant at Rs 62,700 (ex-showroom, Delhi). Hero’s other offering in the 125cc segment, after the Destini 125, faces competition from other similar scooters like the TVS NTorq (Rs 59,900) and the Honda Grazia, for which prices start from Rs 60,723.
The two other scooter makers that are benefiting from the slowing sales of HMSI and Hero are TVS Motor Co and Suzuki Motorcycle India. TVS Motor Co sold a total of 3,81,762 units in April-July 2019, down a marginal 1.52 percent YoY, which can be put down to the poor consumer sentiment stress in the market. However, the company saw its market share grow by 2.67 percent to 18.71 percent from 16.04 percent a year ago.
On June 7, TVS launched two variants of the Jupiter ZX – drum and disc. While the drum-brake model has been priced at Rs 56,093, the front disc brake-equipped version costs Rs 58,645 (ex-showroom, Delhi). Both come equipped with TVS’ version of combined brakes, called SBT, as standard. The ZX variant now gets many new features, including an LED headlight and a digi-analogue instrument cluster.
With the Jupiter and NTorq 125 maintaining good sales traction in the market, the company would be looking forward to the festive season to notch higher numbers.
The biggest market share gainer is Suzuki Motorcycle India, with a sterling performance in April-July 2019. With 2,25,741 scooters sold, it is the sole scooter maker to post positive numbers and notches a robust 26.34 percent growth YoY. This performance sees the company make the highest gains of 3.67 percentage basis points in the April-July period to take 11.06 percent market share, compared to 7.39 percent a year ago.
The Access 125 has turned out to be a game-changer for the company. This popular buy, which is also Suzuki's best-selling scooter, seems to be closing the gap with the Jupiter and is a consistent No. 3, after the Activa and Jupiter. On July 16, Suzuki launched a refreshed version, the Access 125 Special Edition (SE) equipped with a disc brake variant. It is powered by the same all-aluminium, four-stroke, single-cylinder 124cc engine that develops 8.7hp and 10.2Nm of torque.
TVS Motor and Suzuki were the two OEMs which, due to their Jupiter and Access scooters respectively, made smart gains in scooter market share in what was a tough FY2019. Bajaj Auto though, despite not being in the scooter market, was the biggest market share gainer last fiscal. Will they continue to maintain that growth trajectory in FY2020 or will Honda and Hero spring some surprises to rev up their sales? Stay tuned.