Honda's scooter sales back in the fast lane after a steep decline

Honda Motorcycle and Scooter India (HMSI), the market leader in scooters, is seeing a steady recovery after a steep fall in sales volume. This is an indication that the segment, hit hard by the Covid-19 pandemic, is turning the corner.
 
Sales in the first 10 months of the financial year for the segment and HMSI remain in a negative territory. This is owing to the Covid-induced lockdown in March and April in 2020.  But there is a YoY uptick in numbers, albeit by a small margin, indicating that the worst is over for scooter sales in India.
 
HMSI sold 690,350 units in the three months to January (November-January). This is a 2 per cent increase from the 672,850 units it sold in the same period last year, according to the Society of Indian Automobile Manufacturers (SIAM). Honda’s rivals, too, are seeing a similar trend. Still, the overall segment sales is down 27 per cent YoY in the first 10 months of FY21.

 

Yadvinder Singh Guleria, director — sales and marketing — HMSI, said that in the months gone by, the decline was due to urban India being under lockdown. Subsequently, a reduction in the number of overall cases in the country, including in urban India, got customers back into the showrooms.

“With economic activity picking up further in the metros and smaller towns, scooters are set to make a comeback,” said Guleria. Moreover, the trend of schools and colleges starting to resume operations and students coming back to campus will also aid recovery, he added.
 
The local arm of the Japanese two-wheeler manufacturer accounts for every second scooter sold in India. By virtue of being the market leader, HMSI was one of the worst impacted two-wheeler firms. It also prompted the company to initiate a voluntary retirement scheme at one of its plants in January and restructure its manufacturing operations. 

 
The fact that HMSI’s dependence on scooters is very high didn’t help — six out of every 10 two-wheelers sold by the company is a scooter.   This is set to change with the recent motorcycle launches by the company. “An extension into the new segment of motorcycles has really helped,” said Guleria, hinting at the CB350. Honda has a waiting of more than a month for the model, he said.