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Apr 20, 2017 11:33 AM IST | Source: Moneycontrol.com

Splendor no longer the hero, Activa snatches lead in two-wheeler sales

The gearless scooter clocked more sales than anybody else last year to emerge as the largest selling two-wheeler brand in India. This brings the curtains down on the dominance of Splendor, which has not just been the largest selling model for Hero MotoCorp but for India as well for more than a decade.

Splendor no longer the hero, Activa snatches lead in two-wheeler sales

Swaraj Baggonkar

Moneycontrol News

Honda’s best-seller Activa has dethroned Hero's Splendor to take the Japanese company one step closer to attaining the numero uno position in India.

The gearless scooter clocked more sales than its competition last year to emerge as the largest selling two-wheeler brand in India. This brings the curtains down on the dominance of Splendor, which has not just been the largest selling model for Hero MotoCorp but for India as well for more than a decade.

While Activa had surpassed Splendor intermittently in some earlier months during 2016, this is the first time that the gearless scooter emerged on top for a full year.

Activa clocked sales of 2.75 million units last year whereas Splendor managed sales of 2.55 million units, according to data collected by the Society of Indian Automobile Manufacturers. While Activa posted growth of 12 percent last year Splendor grew by just 2.6 percent during the same year compared to 2015-16.

In the earlier years Honda had dramatically shrunk the gap with the Hero-best seller. From a gap of nearly 339,000 units in the financial year 2014-15, Splendor’s lead over Activa was down to under 20,000 units in 2015-16, according to SIAM data.

Hero lost ground despite the fact that the market leader has seven models under the Splendor brand compared to three of Activa. Both brands play in the 100-125cc engine segment and are priced nearly in the same price bracket. In addition, Hero’s reach is double compared to Honda's with more than 6,000 dealerships and service centers.

This is seen as a first major victory for Honda which broke its alliance with Hero seven years ago when the Munjal-family promoted Hero Group bought Honda’s 26 percent in Hero Honda.

While Activa has been very strong in the urban pockets of the domestic market Splendor held on to its rural fan base where the main priority is mileage. Scooter penetration was limited in rural areas as consumers preferred motorcycles for their daily commute and also because scooter supply was restricted.

However, that changed with Honda bringing on-stream the world’s biggest scooter-only plant in Gujarat last year. With a capacity to produce 1.2 million units a year the company invested Rs 100 crore into the new plant.

Also, Honda expanded and made significant in-roads into the rural areas, a market which makes up 50 percent of Hero’s domestic sales. Splendor alone makes a third of Hero’s monthly sales and is mostly bought in the rural markets.

The demonetisation drive during November and December, which hit the rural markets harder, sucked out demand leading to a straight plunge of Splendor sales. From an average of 200,000 units a month Splendor sales fell by 36 percent during December to just 135,000 units.

Scooters began replacing traditional 100cc economy bikes like Splendor in strong urban markets Mumbai, Delhi, Pune, Chennai due to their high utility value as well as ease of riding. Scooters brought forward several women buyers to the market who were reluctant to ride a motorcycle.

Clutch-free, gear-less riding, under-seat storage space and some convenience features like mobile charging made scooters like Activa the best choice for being the first two-wheeler in the family.

Splendor_Activa_FY16-17 sales
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