TVS Motor Company, the third largest two-wheeler manufacturer in India, is understood to be developing an all-new 125cc scooter model(s), which may see rollout early 2017, sources aware of the development told our sister publication Autocar Professional.
The Hosur-based company, which is known for its R&D strength, is also learnt to be considering floating a new scooter brand to launch a line-up of more powerful city scooters. Four different sources, all choosing to stay anonymous, have confirmed to Autocar Professional that TVS is developing 125cc scooter models – and hence a stronger scooter portfolio.
“TVS Motor is readying a 125cc scooter which is estimated to be rolled out early next year. The company is treading its own steady path to develop new products. It is also evaluating the possibility of making a debut in this segment (125cc) under a new brand name. However, it was expected that a 125cc scooter may get branding under the successful Jupiter name,” revealed the source. “The Jupiter has established itself well, and this clearly means that it will continue with its current momentum in the market. However, that is the only large-selling scooter brand from the TVS stable, which means that the company will have to look at coming up with another scooter brand that could sell for them,” disclosed another source.
How the 125cc scooter market in India stacks up
With the new 125cc scooter(s), TVS will enter a sub-segment that offers higher power as compared to the more popular 110cc models. According to Autocar Professional, the 125cc scooter category market in India in FY'16 was around 375,000 units, just 7.5 percent of the overall domestic scooter business. Our analysis forecasts that the segment will garner sales of 475,000-600,000 units by the end of the current fiscal. While this would mark a growth of 27 percent to 60 percent year on year (depending upon the variations in market demand), it also clearly highlights the expanding class within the overall scooter segment. The 125cc category is currently dominated by the Suzuki Access from Suzuki Motorcycle India (SMIL), which has not only established the market for this class over the last decade, but has also been a conventional rival to the bestselling 110cc Honda Activa. However, while the Access continues to be the most popular and segment-bestseller, Piaggio’s Vespa range in the 125cc class sits atop this category with its premium pricing. Major players such as Hero MotoCorp and India Yamaha Motor are absent in this category. Honda, on the other hand, has only one model (Activa 125) on sale. A quick study among Honda Motorcycle & Scooter India (HMSI) dealers reveals that the 125cc Activa is yet to make its mark among buyers, who primarily opt for its 110cc bestseller. This means that TVS aims to predominantly compete with SMIL and HMSI in the 125cc segment once it debuts.
TVS Motor Co vs Hero MotoCorp
TVS is steadily closing the gap with the second largest scooter player Hero MotoCorp. Industry data of FY'16 highlights that while Hero recorded total scooter sales of 818,777 units, TVS was behind by only 45,180 units for the 12-month period. This continues during H1 of FY'17. Hero has reported sales of 448,321 scooters and TVS, 400,753. In September 2016, Hero outsold TVS by only 5,456 scooters. (Hero: 83,990 units vs TVS: 78,534 units). TVS's 125cc scooter is likely to fill this gap for the company. It needs at least one or two more performing brands besides the Jupiter to surpass Hero’s volumes in the near future. The successful Jupiter is now the second largest selling scooter brand in the domestic market. The Maestro, along with the Duet and the Pleasure deliver healthy sales for Hero MotoCorp. TVS, on the other hand, has the Jupiter as the sole performer in the 90cc-125cc scooter category, which, according to market analysts, works more in the favour of its arch rival.
Earlier the better
While it is understood that all the companies aim to be present in all major (growing) product categories, senior industry officials have always reiterated that early to market delivers an upper hand over the rivals (who enter late) and, also in terms of the recall value. Stepping into the 125cc scooter class, TVS is expected to steadily build its (brand) recall in the new segment before Hero MotoCorp and Yamaha follow suit with their plans to tap the growing demand for scooters in India.