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Rediff.com  » Business » Motorcycles vroom past scooters on strong rural demand

Motorcycles vroom past scooters on strong rural demand

Last updated on: November 22, 2018 22:03 IST

The key beneficiary of this expansion in the motorcycle market happens to be Bajaj Auto.

Motorcycles are reclaiming part of the market share they lost to scooters in the world’s largest two-wheeler market over the past few years, thanks to a strong demand, particularly in rural markets.

 

Their share in the domestic two-wheeler market is at a three-year high of almost 64 per cent, up 2 per cent over last year.

In the first seven months of FY19 (April-October), motorcycle sales zoomed over 14 per cent in spite of temporary challenges in the form of a high insurance cost and firm fuel prices.

The industry sold 8.69 million motorcycles in the domestic market, almost double the scooter volume of 4.4 million units.

With a 14 per cent growth, the market share of motorcycles has expanded to 63.9 per cent against 62.1 per cent in the corresponding seven months.

Motorcycles had lost share for five consecutive years since FY14, when it had a market of 71 per cent.

The strong growth in motorcycles has also lifted growth of the two-wheeler industry to 11 per cent against last year’s corresponding growth of 8 per cent in FY18.

The surprise element in the two-wheeler market, however, is the scooter, whose growth rate has more than halved.

Against a 14.6 per cent growth in domestic volume last year, the industry’s scooter growth in the first seven months of the current year is just 6 per cent and a total of 4.4 million scooters have been sold.

Scooters have had a phenomenal growth from less than 25 per cent of the market share in FY14 to over 33 per cent in FY18.

Some believe that scooters have reached a temporary saturation. The record high petrol price also seems to have driven buyers to motorcycles due to their better fuel efficiency.

With a growth rate lower than the two-wheeler industry, the scooter market share is down from 33.83 per cent in April-October (FY18) to 32.32 per cent this year.

This happens to be the first decline in the segment’s share after at least five consecutive years of expansion.

Growth of the top player in the scooter market, Honda Motorcycle & Scooter India, also slowed to a single digit of 5.6 per cent (including motorcycles).

The key beneficiary of this expansion in the motorcycle market happens to be Bajaj Auto.

The Pune-headquartered player has expanded its share in the two-wheelers market to 11.5 per cent against 9.9 per cent in the first seven months of FY18.

Its domestic motorcycle dispatches have growth over 28 per cent to 1.56 million units.

The company had lost share in FY18. Bajaj does not manufacture scooters any more.

Motorcycle market leader Hero MotoCorp clocked a 10 per cent growth in domestic sales (including scooter) to 4.85 million units.

However, growth in its motorcycle sales is stronger at 13 per cent to 4.38 million units, enabling it to hold on to a share of about 50 per cent in the domestic market.

“Growth in the motorcycle segment in recent months has outpaced scooter growth owing to multiple macroeconomic factors and pent-up demand from both urban and rural markets.

"Hero MotoCorp’s consistent sales during the year have also contributed significantly to the segment’s growth.

"The recent upsurge in demand for the motorcycle segment is a positive sign for the industry,” said a spokesperson.

Growth in motorcycle demand has also brought Hero’s Splendor back to its position of being the largest sold two-wheeler in the country for the last two consecutive months - September and October.

Photograph: Rupak De Chowdhuri/Reuters

Ajay Modi in New Delhi
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