Move over motorcycles, scooters are way more in demand these days

Scooters captured more than one-third of domestic two wheeler market for first time in over a decade

Indian Companies News : Think about the slowest growing segment of Indian automobile industry. It is not the three-wheelers or the commercial vehicles. It is the motorcycle, the biggest segment of the industry by volume, marked by top players like Hero MotoCorp, Bajaj Auto and Honda.

Society of Indian Automobile Manufacturers (Siam) data shows that the Indian motorcycle market has grown by less than six per cent cumulatively since FY14. In the same period, domestic passenger vehicle market expanded by 20 per cent, commercial vehicles grew by 13 per cent and three-wheelers by 12 per cent.

The volume of motorcycles, the largest segment by units sold, has remained stuck between 10 and 11 million units a year in last four years. While two consecutive deficient monsoons (2014 and 2015) were a factor, the larger impact is coming from a shift towards scooters. If we include scooters, the two wheeler market shows growth of 19 per cent between FY14 and FY17. This implies that the all the growth is coming from scooters.

Domestic scooter market has expanded from 3.6 million units in FY14 to 5.6 million units in FY17, growing 55 per cent. However, motorcycle volumes grew only six per cent from 10.48 million units to 11.09 million units in the specified period. This is also visible in the volumes sold by top players. Hero MotoCorp, the country’s largest two-wheeler maker, had sold 5.42 million motorcycles in FY14 and its domestic sales stood at 5.69 million units in FY17, showing a cumulative growth of five per cent.

Bajaj Auto, the second biggest player in the domestic motorcycle market, had sold 2.09 million units in FY14 and sales dipped marginally to 2 million units in FY17. 

“There has been hardly any growth in motorcycle sales for the last four years,” said the Pune headquartered company in its FY17 annual report. 

The lack of growth to some extent is an outcome of two consecutive years of deficit monsoon (2014 and 2015) which impacted sentiments in rural markets, which accounts for almost half of motorcycle sales. At the same time, there is a shift towards scooters in many urban markets due to the convenience it offers.