India is currently the world’s largest two-wheeler market by volume having grown exponentially over the past 5 years. At more than 16 million units sold per year, the two-wheeler industry single-handedly contributed more than 80% of the total automobile units sold in India1. Even in terms of exports, two-wheelers are the proud products of the “Make-in-India” campaign where nearly 7 in ten automobiles delivered out of India are two-wheelers.
However, the growth of two-wheelers is not uniformly spread across the segments. Scooters, as a segment, have outpaced the two-wheeler industry’s growth by more than two times. In 2010, scooter sales made up about 16% of total domestic sales. Now, this figure has swelled to nearly 30%. This translates into a significant growth rate consistently sustained at 25% annually.
Japanese two-wheeler manufacturers (Honda, Yamaha and Suzuki) is forecasted to constitute nearly two-thirds (66%) of domestic scooter sales in 2016 (Source: SIAM) of which Honda Motorcycles and Scooters India (HMSI) alone accounts for over half of the scooter market. In particular, Honda’s Activa series accounted for 49% of all scooters sold in India and has been consistently one of the top two-wheeler models by sales in the last 12 months. It is also the first scooter in India to cross the 10 million sales mark and industry observers have commented that the re-scooterization of India can partially be attributed to the Activa.
Historically, scooters have been associated with older persons and females. In most cases they played the role of the family machine utilized to run daily errands. Motorcycles, on the other hand, were preferred when there was a heightened need for better fuel economy, longer journeys, better ride, handling and engine performance. With motorcycles offering a ride more suited for Indian road conditions together with an inherent appeal to the young, the growing preference for scooters have baffled many industry observers.
However, when we seek to understand the reasons for the rise in popularity of the scooters by examining the customers’ perspective of more than 19,000 two-wheeler owners across India, three key reasons emerge that seem to be driving this phenomenon and may help explain the trend.
The Comfort Factor
Scooters in the recent past have witnessed technical advances in key vehicle attributes, taking them closer to and in some cases surpassing motorcycle-like performance. There has been a transfer of motorcycle technology to their smaller cousin such as:
· Scooter wheels have evolved from 8” to 10” with tubeless tires as the de facto standard. Some OEMs are even offering scooter with earlier unheard of 12” wheels.
· Motorcycle-like telescopic suspension is now available in scooters providing longer suspension travel and better shock absorbing characteristics.
· Increasing number of scooters now offer front-disc brakes along with a system that coordinates brake application between the two wheels, thus according safer braking combined with shorter braking distances.
Most importantly, a scooter weighs on average 8% less than an average Economy or Executive segment motorcycle and this becomes an important consideration factor for female riders. This lighter weight combined with the above-mentioned technical advances means that scooters can now offer ride, maneuverability and stability characteristics rivalling and at times better than a motorcycle.
Versatile and Contemporary Features
Scooters are traditionally designed with key features such as accommodative footboard, a protective front panel, large under-seat lockable storage that provide comfort, flexibility and ease of being driven especially for female riders who may be wearing long saris.
Several contemporary add-ons have been included into scooter design such as an OE charging port which is highly practical and valued by the connected generation.
Other contemporary features are gearless scooters which not only make riding easier but have simplified the process of learning to ride a two-wheeler for the first-time buyer. All these contemporary offerings in the scooter segments are working in combination to heighten the versatility aspect of the machine that is capable in serving multiple needs.
The Style Quotient
This is by far the strongest influencer that has encouraged the increase in the purchase of scooters.
Two-wheeler makers now offer a range of scooters, stylishly designed to appeal not only to a wider demographic range but also to the section of young males which earlier were never considered as potential scooter buyers. How they achieved this was to cleverly incorporate styling features that also serves as practical riding attributes such as optimized seats, which make it easier for a rider to plant both feet on the ground while seated, a center stand which is designed for easy usage and a body design that aids in balancing of the vehicle. Such design elements have also attracted many women to ride the modern scooter.
Fuel Economy Tradeoffs
Fuel economy is an important purchase reasons in a price sensitive market like India. Findings from J.D. Power syndicated studies show that scooter owners reported a fuel economy of 45kmpl as compared to 55kmpl reported by motorcycle owners. The studies go on to report that 50% of two-wheeler owners ride an average of 500 kilometers per month.
Considering prevailing petrol prices (INR 61.87/L: Delhi), the fuel spend for a scooter (INR 41427) is more than 20% higher than a motorcycle (INR 33,747). But surprisingly, this does not cause the popularity of scooters to wane because scooter owners travel much less kilometers on a monthly basis compared with their motorcycle counterparts.
J.D. Power data finds that less than a quarter of scooter owners ride it for relatively long distances (defined as more than 833 kilometers per month) and therefore, two-wheeler users who are clocking lower mileage are less sensitive to fuel costs. In short, the impact of lower fuel economy offered by a scooter is mitigated to an extent.
With all the reasons being examined, scooters that are winning the popularity contest are primarily riding on a fast-improving product offering that comes packed with innovative and contemporary features and most importantly, a fuel economy figure which does not sting!
Co-written by Rajat Agarwal, Research Specialist, J.D. Power Asia Pacific