Swaraj Baggonkar Moneycontrol News
Scooters may have had a dream run in the last few years beating motorcycle growth rate by a huge margin, but their forward march was halted last month when the segment posted its maiden fall in 15 months.
Scooters sales fell by 1.3 percent to 555,467 units in May, as against 563,326 units posted in May last year. During the same month, motorcycle sales grew 15 percent to 1.22 million units as compared to 1.06 million units sold in same month last year, according to data provided by the Society of Indian Automobile Manufacturers.
Last year, scooter sales grew by 20 percent to 6.7 million units as compared to 14 percent growth recorded by motorcycles, which sold 12.6 million units.
Though the May correction could have led market watchers to believe that scooters, which have a share of 32 percent, have reached a saturation point, market leader Honda Motorcycle and Scooter India (HMSI) has termed May sales report as an aberration and not a trend.
Honda, which saw its scooter sales slide by 2 percent in May, is the market leader in the scooter segment with a share of 62 percent led by the top-seller Activa. The Delhi-based company reasoned that the fall in scooters was primarily due to strong revival in demand for motorcycles in large agrarian states like Uttar Pradesh, Bihar and Rajasthan.
Yadvinder Singh Guleria, senior vice president – sales and marketing, HMSI, said, “We should not be reading it as a trend as such. FY18 over FY17 data clearly says that there is hardly any state where scooter growth has not surpassed motorcycle growth. Big markets such as UP, Maharashtra, Tamil Nadu everywhere scooters grew more than motorcycles. April and May, last 3-4 years, rural market had been under stress. In last six months or so we saw there is (a) positive sentiment in the rural market which helped motorcycle demand because that’s where motorcycles are sold more than scooters.”
Monsoon impact
April, May and June are ‘seasonal period’, which is when the marriage season takes place, added Guleria. Thanks to a bountiful monsoon last year two-wheelers buyers in UP, Bihar and Rajasthan pushed motorcycle sales to a new high ahead of the marriage period.
While the three states contribute 25 percent of the overall two wheeler sales in India, motorcycles control 80 percent of the sales in those states as against the national average of 62 percent.
“If motorcycle sales revive in these three states then it impacts the national picture as well. June will also see motorcycle sales higher than scooters. The trend however is still in favor of scooters. There will be some double digit growth for the scooters in June but in Q1 motorcycle sales will be higher”, added Guleria.
For HMSI, scooter sales in rural markets make up 30 percent of its total scooter sales while for the industry it is slightly less.
“There are states where scooter penetration is as low as 15 percent and there are states where penetration is a good 65 percent. A significant state like Kerala has the highest scooter penetration in the country at 64 percent and yet Kerala has grown at 19 percent. So states where scooters have a significant presence have also posted double digit growth. In FY18 in Rajasthan motorcycles grew by only 9 percent while Honda scooters have grew by 22 percent”, added Guleria.
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