Honda Activa contributes 38% of incremental industry sales in July

Mumbai: For the seventh consecutive month in July, the Activa, flagship scooter from Honda, has not only topped the sales chart among all two-wheelers but has also contributed to 38 percent of the incremental sale in the industry.

The achievement has made the Japanese major to revise upwards its scooter sales target to over 24 percent this year.

The Activa for the first time ended the 15-year reign of Splendor from the Hero MotorCorp stable in March 2014 and also for five months in 2015.

But since January this year, it has not looked back with July recording the widest sales margin over the Splendor with a lead of 58,413 units, according to the Siam data.

July also marked the highest-ever sales for Activa at 2,56,173 units since its launch in 2001.

It can be noted that in March 2014, the Activa for the first time ended the reign of the Splendor by selling 14,150 units more at 1,77,928 units than the Hero brand.

In that year, it also held the lead in July and September. Similarly, in 2015, it led the Splendor in five months.

In January this year, the Activa took a lead of 10,778 units over the Splendor, which almost doubled to 20,714 in February, but declined to 10,717 in March.

It further came down to 9,697 in April but zoomed by 30,307 units in May and by 22,077 in June. July saw a lead of 58,413 units over the Splendor.

When contacted Honda Motorcycles & Scooter India (HMSI) senior vice president for Sales and Marketing, YS Guleria, attributed the rising industry leadership of the Activa to the brand salience as well as the reduction in the back orders following the commissioning of the 0.6-million second line at its Gujarat plant in June.

"We are happy that the Activa continues to cheer us with ever-increasing monthly volumes and leading the industry volume chart. July saw the maximum lead over the Splendor with the Activa leading by 58,413 units," Guleria told PTI over phone from Delhi.

"We should also note that the Activa contributed as much as 38 percent of the incremental sales of 1,62,703 units in the industry in July," he added.

It may be noted that the Activa has been steadily

narrowing its gap with the Splendor since March 2014, when it trailed by 1,92,096 units against the Hero brand, which more than halved to 80,170 units in 2015 when it sold 2,409,166 units against Splendor's 2,489,336 units.

In 2014, the cumulative Activa sales stood at 1,085,835 units against 2,277,931 units of the Splendor, the company said.

During the first seven months of 2016, cumulative lead of the Activa over Splendor stood at 1,62,703 units at 1,594,188, while that of the Hero brand stood at 1,431,485.

Guleria is confident that from next month, when the Gujarat facility will reach its full 1.2 million capacity, the company will be able to eliminate order backlogs which since May has come down to 18,000 units a month from over 26,000.

"Looking at the increasing demand coming in from rural markets, I think we will be easily able to close the year with over 24 percent spike in scooter sales, which currently is trending at 24 percent," he said, adding the normal monsoons should help the company achieve this target along with increased deliveries, especially to the hinterlands markets.

At the beginning of the year, HMSI had set an over 22 percent sales growth target for the year.

Guleria, however, was quick to add that during the forthcoming festival season, the huge lead that the Activa has seen now may narrow. But he is confident that the overall lead will be maintained.

Despite the good show, Activa's market share remained flat at 59 percent in the scooters space in July as the market too clipped 24 percent, which was at the same growth rate of HMSI as well, Guleria said.

He, however, said the overall share of the scooters in the two-wheeler industry rose to 31 percent in July from 28 percent a year ago.

When asked about the festival sales plans beginning next month with Onam in Kerala, he said, the company will be holding loan melas under which its partnering banks will waive processing fees.