New Delhi: Hamara Bajaj may have driven into the sunset believing that scooters are unviable business but the segment is proving the sceptics wrong, posting over 52 percent jump in sales in the first 7 months this fiscal over the same period last year.
According to Society of Indian Automobile Manufacturers (SIAM), the domestic scooter segment witnessed sales of 11,63,127 units during April-October, 2010-11 compared to 7,64,643 units in the year-ago period.
Repositioning of products, targeting new customer segments and entry of new players led by firms such as Honda Motorcycle & Scooter India (HMSI) has resulted in revival of the scooter market in the country.
"At one point, people had written off scooters. However, scooters have been repositioned and it has helped. It is doing exceedingly well by targeting a different segment of customers," SIAM Director General Vishnu Mathur said.
In October alone, the segment witnessed 104.27 percent jump in sales to 1,88,633 units compared to 92,346 units in the month last year.
Mathur said the demand from urban areas, mainly women and young people, is driving the robust revival of the scooter market.
During 2009-10, scooter sales in the domestic market stood at 14,62,507 units compared to 11,48,007 units in the previous fiscal, up 27.40 per cent.
The current market leader HMSI sold 5,20,466 units in the first 7 months of this fiscal, a jump of 35.41 percent over 3,84,369 units in the same period last year, SIAM said.
The firm commands 44.75 percent market share at present.
"The latent demand for scooter was always there because of its utility value; it was a question of bringing the right product. When the scooter market was down, it needed a leader to revive the segment," HMSI Operating Head (Sales and Marketing) NK Rattan said.
In December 2009, Bajaj Auto had said that it would stop making scooters as it was no longer a viable business with motorcycles taking over the Indian two-wheeler market.
However, industry observers say that HMSI and other companies may be proving Bajaj Auto`s decision wrong as scooter sales continue to surge.
"By catering to different segments and by introducing new products and continuously upgrading them, we have played the role of leader in reviving the scooter market," Rattan said.
Chennai-based TVS Motor Co has registered 44.82 percent rise in scooter sales this fiscal at 2,54,812 units as against 1,75,953 units. It has a market share of 21.91 percent.
The country`s largest motorcycle maker Hero Honda also witnessed 58.26 percent growth during April-October period in scooter sales to 1,76,950 units compared to 1,11,811 units. It commands market share of 15.21 percent.
"Scooter is a product whose time has come. Many other players have also come into the market and is helping in expanding the segment," Hero Honda Senior vice president
(Marketing and Sales) Anil Dua said.
The company`s scooter market is 70 per cent dominated by women as they find it more convenient, he added.
"Earlier, the scooter market was mainly geared and male oriented. When we entered in 2006, with Pleasure, we came with gearless (product) and targeted the women`s (segment) and the strategy worked," Dua said.
Speaking about the future, industry players said the segment will continue to grow at very healthy rate.
"As for the future of the segment, I think it will continue to grow at double digits as more products are being introduced and the overall economy is growing... Many players are coming into the market targeting different segments and it has helped in expanding the market," Rattan said.
Dua said Hero Honda will increase the production of scooters to about 35,000 per month in the next few months from the current 27,000 per month to meet the growing demand.