Rising scooter volumes trigger new market dynamics

Five companies get more volumes from scooters than motorcycles

A rapidly growing scooter market is driving in a new trend to the domestic two-wheeler market.

Of the six manufacturers who make motorcycles and scooters, five now get more money from scooters than motorcycles. This was not case three years ago. In FY14, only two such players, Honda and Suzuki, were selling more scooters than motorcycles.

This list has now expanded to include TVS Motor, Yamaha and Mahindra two-wheelers. Hero MotoCorp is the only company (manufacturing both two-wheelers) that still sells significantly more motorcycles than scooters. Motorcycles have been Hero’s strength and its large volumes come from the rural markets where scooters are not yet the preferred two-wheeler.

Hero, the largest two-wheeler maker in the country, dominates the motorcycle market with a 51 per cent share. Its former partner, Honda Motorcycle & Scooter India, leads in scooters and enjoys a share of 57 per cent. Scooters have helped the Japanese company become the second biggest player in world’s largest two-wheeler market.

Unlike motorcycles, scooters have grown at high double digits in recent years owing to increasing acceptability. From a share of just 17 per cent in FY11, scooters accounted for 32 per cent of the 17.58 million two-wheelers sold in the domestic market last year. The share of motorcycles has been on a decline. Scooters posted a growth of 11.39 per cent last year, while the motorcycle market expanded by only 3.68 per cent.

The 32 per cent market share of scooters is set to expand further. Roy Kurian, vice-president (sales & marketing) at Yamaha, said scooters could post a growth of 15-20 per cent during FY18. “We have started getting higher volumes from scooters for the first time since FY17. It now stands at about 55 per cent and we expect it to grow further. Scooters are seeing greater acceptability.”

Scooters have been able to offer better mileage in recent years. This, along with enhanced road networks, has helped volumes grow. Factors such as growth in the population of working women as well as a scooter’s unisex appeal, light weight and automatic transmission have also contributed to the growth.

In many families, scooters are usually bought by males but are now increasingly being used by women. In some states such as Kerala, Goa, Gujarat and Delhi, the share of scooters is well above 40 per cent, sometimes going up to 60 per cent. 

India was once primarily a scooter market and geared scooters ruled the market till the mid-1990s. Bajaj Auto was a dominant player. However, the entry of global players and introduction of newer motorcycles shifted demand away from scooters. Motorcycles surpassed scooters gradually. Gearless scooters from Honda brought interest back among buyers. However, Bajaj exited the segment. Today, it is the only major player that does not make scooters.