TWO-WHEELER SPECIAL: Standing Tall On Two Wheels

Within the two wheeler space, of the 6019076 units of two wheelers sold in the domestic market in the first four months of the current fiscal (April to July 2016), scooters contributed 1876595 units. This amounts to roughly about 31pc of the total cumulative domestic sale. Motorcycles at 3850441 units, accounted for 63pc of total cumulative domestic sale. The remaining was taken up by sale of mopeds where TVS Motor company is the only player.

In 2015-16, April to July 2015 period, two wheeler manufacturers had sold 5276181 units in the domestic market. In the same period, cumulative domestic sales constituted 1511797 units, signifying about 29pc share in the total two wheeler sales. Motorcycles at that point of time accounted for 3521076 units, constituting almost 67pc of total two wheeler sales. It is thus obvious that there is an apparent shift in customer preferences towards scooter which has been witnessed in the last few years.

In 2014-15, April to July 2014 period, 5256429 units of two wheelers were sold in the domestic market. Of this scooters contributed 1382558 units signifying a 26pc share, while motorcycles sold roughly 3631964 units, signifying 69pc sales.

In 2013-14, the story was a lot more different with scooters constituting 23pc of domestic sales for the period April to July 2013. Total two wheelers sold in the domestic market during this period was 4622669 units of which scooters accounted for 1057029 units and motorcycles accounted for 3333628 units, which meant it had a share of 72pc of the market.

Share % in total two wheeler domestic sales

It is very evident that the share of scooters in the overall domestic sales of two wheelers has been increasing over the years. Leading this scooterisation drive is obviously Honda Motorcycle & Scooter India with its popular Honda Activa brand.

Says Yadvinder Singh Guleria, Senior Vice President - Sales & Marketing, Honda Motorcycle & Scooter India Pvt. Ltd, “Activa today represents the metamorphosis of the society. The superior convenience, unisex appeal coupled with product features (increased mileage, style and technology) has converted millions from pillions to riders. Honda’s Activa has come to symbolise a remarkable blend of reliability, comfort & convenience, style and uncompromised performance.”

Ending the 17 year long monopoly of motorcycles, Honda’s Activa (an automatic scooter) is now ruling two-wheeler sales and is India’s highest selling two-wheeler of 2016. It has a lead of over 1 lakh units over its nearest competition. Activa’s domestic sales stood at 1,338,015 units in 2016 (Jan’16 to June, 2016) compared to 1,233,725 units in the same period of 2015. Activa added a phenomenal 197,295 units over last year in just six months (Jan to June, 2016) to be on the top!

Since its launch in 2001 as the 1st two-wheeler by Honda 2Wheelers India, Activa has reactivated the dying automatic scooter market.

Sales of Activa rose exponentially from 55,000 units in its debut year (FY’2001-02) to over 2.46 million units in last FY’2015-16. Every second automatic scooter purchased in India today is a Honda Activa.

In fact Activa sales alone contributes 15pc to the domestic 2 wheeler industry – which is more than entire 125cc motorcycle segment sales put together!

Month-wise domestic sale trend:

There is no denying the fact that HMSI is indeed the clear leader in the scooter segment in the country. Of the seven scooter makers in the country, HMSI is the clear leader with sales of 1106284 units during April-July 2016. Second on the list is Hero MotoCorp, followed by TVS Motor Company, India Yamaha, Suzuki Motorcycle, Mahindra Two Wheelers and Piaggio.

Cumulative domestic sales of scooters (April-July 2016)

Source: SIAM

Cumulative domestic sales of motorcycles (April-July 2016)

Source: SIAM

“With more than 50% market share, Activa continues to be in the forefront of scooter demand. To cater to the increasing customer demand, Honda 2Wheelers India has appropriately invested in a scooter only plant at Vithalapur in Gujarat. We believe the scooterisation trend has just started in India and Activa is the trendsetter of the segment today,” notes Guleria of HMSI.

Commenting on the scooterisation of the two wheeler industry, Roy Kurian, Vice President, Sales & Marketing, Yamaha Motor India Sales Pvt. Ltd. says “People are shifting from motorcycles to scooters now, which is quite evident, this is happening mostly in cities and also in tier II and tier III cities as well because more and more females have started working or are going to colleges and they want personal mobility. We are able to see that this change is happening and earlier the contribution of scooters was 25%-30%, now it is at 35%. What I feel is in a year or two you’ll see scooters contributing to more than 40%. Already some states have crossed 60%, like Kerala scooters are more than 60-65%. Tamil Nadu is at 60%. Entire west, if I talk about Maharashtra, is more than 50%. This change in trend that we’re able to see, it hasn’t come to the North at the moment but I believe eventually it’s going to come to the North as well. These are the changes which I’m able to see from my side.”

Equally excited about the growth of the scooter market is Arun Siddharth, Head – Marketing (Motorcycles), TVS Motor Company who says, “The scooter segment has performed consistently well for us and we have a 14 percent market share in scooters and we sell 65,000 scooters every month. We intend to grow our market share in the scooter segment to 16-17 percent. Jupiter is our flagship product and the new MillionR edition that we recently launched with 10 new features has been received well in the market.

We believe the scooter industry is poised to expand and with a wide product portfolio that we have, we will be able to cater to a wide range of consumers with products designed to meet their needs.”

Mahindra Two Wheelers may be a late entrant to the Indian two wheeler market but is surely and slowly introducing new products into the market to garner market share. Says Vinod Sahay, CEO, Mahindra Two Wheelers, “With the rise in the purchasing power and internet penetration across all segments, the Indian consumer is becoming increasingly aware of the latest technology, features and is ready to explore new products. This has led to a clear polarization of the market with one end of the segment, opting for the premium and innovative products, whereas the other end who are still value conscious.”

The Mighty Motorcycle Brands

On one end of the Indian motorcycle market are the so called affordable motorcycles with engine capacities in and around 100cc and 300cc. But as power of the engine increases and performance gets into a new level, enter players like Harley-Davidson, Triumph, Kawasaki, Ducati, Benelli (DSK Benelli), MV Agusta, Indian Motorcycle and the likes. Except for Harley-Davidson, Triumph Motorcycles and Kawasaki, none of the others share their sales data with SIAM. According to Siam data, Harley-Davidson sold 1420 units of their motorcycles in the domestic market in the four months of the current fiscal 2016-17. Triumph could only manage 471 units while India Kawasaki sold 505 of their motorcycles.

“We have built a firm foundation over the past seven years and consistently demonstrated the power of being a customer-led company very successfully. We continue to receive unparalleled enthusiasm for the brand and now have over 12000 proud owners experiencing the freedom and adventure of Harley-Davidson on Indian roads since we opened our first dealership in 2010. Industry body SIAM has consistently placed us as the undisputed market leader in India in the segment of 600 + cc motorcycles. Our market share as per SIAM currently stands at 59.8% which is significantly more than the combined share of other players,” says Vikram Pawah, Managing Director, Harley-Davidson India.

But players like Benelli of Italy are very aggressive on the Indian soil. This Shirish Kulkarni controlled DSK Motowheels the company that has collaborated with legendary Italian superbike manufacturer Benelli recently shifted its CKD plant from Wai, Maharashtra to Takwe, near Pune. This shift has enabled the company to achieve a production capacity of 500 – 600 units per month. The plant currently operates in single-shift and has two assembly lines – one each for the engine and for the motorcycles where Benelli and Hyosung models are assembled. The company plans to begin its capacity expansion programme at the plant post the launch of the Benelli 302R. By 2018, the company should reach a production capacity of 50,000 units per year.

In the meantime, since the launch of Benelli superbikes in India in March 2015, DSK Motowheels and Benelli have sold 3,000 bikes in India with DSK Benelli TNT 600i being the fastest selling model from the brand, registering 1000 units sold already.

Benelli motorcycles sold in the country at present include sporty-looking Tornado Naked Tre, TNT superbikes that encompass the TNT 25 – Single cylinder 250cc engine, TNT 300 – In-line two cylinder 300cc engine, TNT 600i (ABS) – In-line four cylinder, 600cc engine; TNT 600 GT - In-line four cylinder, 600cc engine; TNT 899 – In-line, three cylinder 898cc engine and the TNT R – In-line, three cylinder 1131cc engine.

Says Shirish Kulkarni, Chairman, DSK Motowheels, “DSK Benelli has managed to carve a strong niche for itself in India’s superbike industry thanks to our emphasis on performance coupled with compelling design language. We have established our brand leadership stance on the basis of our diverse portfolio that offers superbikes at various price points. Our overall vision is to create a vibrant superbiking culture in India and help more and more riding aficionados experience the pure pleasure of owning an Italian superbike unlike any other.”

A recent entrant to the world of superbikes is another legendary Italian superbike maker MV Agusta which has entered the country through the Kinetic Group. MV Agusta has entered into an exclusive partnership with Pune’s Kinetic Group. The company unveiled its first range of superbikes - the F4, F3 and Brutale 1090 -which will now be available at its first ‘Motoroyale’ dealership in Pune. The company will operate as MV Agusta India Pvt. Ltd.

Ajinkya Firodia, Managing Director of MV Agusta India Pvt. Ltd feels that his company has brought in the Agusta brand in India at a right time. “The Indian superbikes market has been growing very aggressively.  Various brands have established themselves in the past 6-7 years.  While not all of them have published figures, the superbikes market is about 12,000 vehicles annually, making India one of the most potential markets for superbikes. With a growing rate of 15 – 20%, it is estimated that the market will touch 20,000 – 25,000 vehicles annually by 2020 which makes me positive that Motoroyale has launched MV Agusta in India at the perfect time”

Equally emphatic about the growth of India’s luxury motorcycle market is Pankaj Dubey, Managing Director, Polaris India Pvt Ltd. He says, “India’s Two-wheeler market is one of the largest and the fastest growing in the world. The CAGR of luxury bike market is projected at 20% till 2020. We are very excited with the positive response received by Indian Motorcycle launch in India. In the year 2011, Polaris acquired Indian Motorcycles and in the year 2013, we launched Indian Motorcycle’s products internationally. It took us about six months to introduce the entire range in India and it was in May 2014 that we inaugurated our first dealership in India in Gurgaon. It has been almost two years since then and it has been an upward journey for the brand.”