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BUSINESS NEWS
Activa overtakes bikes, revives scooter raj in India
 
(KOLKATA, Apr 18,2017):After trailing behind motorcycles for threeandahalf decades, a scooter brand has reemerged to become India's largestselling twowheeler . Honda Activa, that had intermittently taken the lead in 201516, has convincingly raced ahead, leaving Hero Splendor behind by 1.97 lakh units in FY17.

"This caps the amazing comeback of scooters that was considered a dying segment till Activa arrived in 2000 and led the revival. With scooters now penetrating semiurban and rural areas, we are confident of holding on to the numero uno position," Honda Motorcycle & Scooter India (HMSI) senior VP (sales & Marketing) Yadvinder Singh Guleria said.

From 1948 when Bajaj Auto became the first Indian scooter dealer till the mid1980s, scooters had enjoyed a dominance. In between, there were the likes of Automobile Products of India (API) that had introduced the Lambretta scooter in 1949; Andhra Pradesh Scooters Ltd that manufactured Allywn Pushpak and LML which entered into a tieup with with Piaggio. The same year saw the entry of India's first gearless scooter Kinetic Honda. But it was foreign joint ventures in motorcycles and introduction of stylish and fuelefficient bikes that spelt doom for scooters.

Honda and Hero parted ways and the Japanese major arrived in 2000 with the Activa, the gearless scooter which resuscitated a segment that was on coma and has now emerged a clear leader, overtaking the 100cc Splendor that has been the No. 1 motorcycle for years.

"Scooterisation is increasing in India. In the Indian twowheeler industry, scooters grew by 11% last year against motorcycles that grew by just 4%. As scooters gain wider acceptance in semiurban and rural markets and women become more economically independent, it will reflect in more scooter sales. In the next fiveseven years, scooters should be 40% of the twowheeler pie," said Guleria.

Nearly a fourth of Honda's scooter were purchased by women. But company officials believe women comprise almost 35% of scooter riders. In contrast, less than 5% motorcycles have women riders.


"The advantages that had made motorcycles popular have in recent years been eroded with gearless scooters offering riding ease, new technology narrowing the gulf in mileage and better rural roads allowing scooters to greater access. Also, there are more working women in teaching and health sector and more elderly who are active. Both prefer scooters," said Guleria.

He though is aware that to bridge the gap with Hero, the market leader in twowheelers, Honda has to sell more motorcycles. While the company currently has a marketshare of close to 60% in scooters, it has only 14% of the motorcycle market and ranks behind Hero and Bajaj. In twowheelers though, Hero is No. 2 after Hero with TVS and Bajaj behind it.


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