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Rediff News  All News  » Business » For scooters, it's yesterday once more - almost

For scooters, it's yesterday once more - almost

June 20, 2009 01:22 IST
Scooters, which almost disappeared into the dark alleys of nostalgia, are making a grand comeback. The golden days of the early 80s, when scooters had a 64 per cent market share, are still far away. But the revival signals are strong.

Just a year ago, of every 100 two-wheelers sold in the country, only 12 were scooters. That number went up to 16 in the past financial year and is projected to zoom to almost 20 this year. There's more: the scooter market grew in double digits last fiscal, outperforming the two-wheeler market, which grew 2.6 per cent in the same period.

The waiting list for scooters has also made a comeback, something unthinkable a couple of years earlier. Honda Motorcycles and Scooters India, for example, has a one-month waiting period for its new Activa (110 cc); six months before, it was just 10 days. Encouraged, it is ramping up its monthly production to 60,000 from 40,000 earlier.

Scooter manufacturers said the 1.14 million-strong domestic market was expected to cross 2 million units in the next four years.

That explains the entry of a host of newer players in the segment, such as Mahindra-Kinetic and Yamaha. Sensing competition, the established players -- Honda, TVS Motors, Bajaj Auto, Hero Honda and Suzuki -- have hit the drawing board once again, to pull out flashy, high-powered and ungeared scooters.

Naresh Rattan, HMSI's divisional head (sales and marketing), said many urban markets in India were seeing a transition from motorcycles to scooters. "An increasing number of people are opting for scooters over bikes because they are hassle-free and very convenient, with mileage almost on a par with motorcycles. We do not think that a growth of 15 per cent year-on-year is difficult to achieve," he said.

HMSI has a dominant 55 per cent market share, followed by TVS Motors with 19 per cent and Hero Honda with 14.5 per cent. Most companies currently produce scooters in the 100-125cc range that are targeted at customers who want higher mileage and are ready to compromise on power. Generally, an entry-level bike (100cc) is more powerful and economical than a gearless scooter.

To counter this, companies are working on scooter models that generate higher power without undermining the fuel economy. The result will be a product that matches the performance of motorcycles while being more comfortable, agile and easy on the pocket.

For instance, Chennai-based TVS Motors, makers of Scooty, are developing a premium ungeared scooter that will be more powerful and superior on design and styling. The company is learnt to have developed a new platform, much more powerful than the 90cc Scooty.

Japanese major Yamaha, known for its premium scooters globally, has just completed a market study for the launch of such scooters in India. But the company is keeping its cards close to its chest. Sanjay Tripathi, department head - product planning and strategy, Yamaha Motor India, said: "We are yet to take a decision on what products to launch in the scooter segment but we are actively studying it. Depending on the demand and suitability, we will take a call."

The country's second largest bike maker, Bajaj Auto, is also developing a completely new, ungeared, scooter. To be launched in 2011, it is aimed at taking on the products of HMSI. This product will be high on power output, like the company's current bike range, but will not sacrifice on fuel economy.

Mahindra & Mahindra, a new entrant, is also learnt to be working closely with Taiwan's San Yang Motor company for new product development, as well as technology sourcing. SYM will keep its focus on gearless scooters, while M&M will cater to the entire spectrum of the motorcycle market from 100cc and above.

A company official said the strong R&D support of M&M would help the company achieve technological prowess for developing new and powerful models in the scooter range. "It is just a matter of time that the market will feel our presence," he said.

Others aren't far behind. For example, LML, which re-entered the domestic market with its Vespa brand of geared scooters in April 2007 after an 18-month hiatus when it had to stop production due to fund crunch and labour problems, launched a four-stroke version of its NV brand of scooters last month in select markets.

Swaraj Baggonkar