Business Today

Return Of The Scooter

For the first time in a decade, Honda's Activa scooter has sold more than Hero's best-selling Splendor motorcycle.
Sunny Sen | Print Edition: Dec 8, 2013
Honda Activa pips Splendor sales for first time in a decade
Honda Activa scooter at Manesar plant in Gurgaon. Photo: Reuters

Just two years after the turn of the century, Hero Honda overtook Bajaj Auto , riding on the stupendous sales of its Splendor motorcycle.

In October this year, however, Hero MotoCorp 's leadership was challenged by its erstwhile partner, the Japanese automaker Honda. Having parted ways with the Hero Group in late 2010, Honda achieved the feat of getting sales of its Activa scooters to zoom past those of Hero's Splendor. The achievement is all the more remarkable considering that for a decade now, scooters have been considered yesterday's vehicles - wobbly and far less stylish than motorcycles.

Honda sold 141,996 Activas in October compared to 124,217 Splendors. "It has not happened overnight," says Yadvinder S. Guleria, Vice President, Sales and Marketing, Honda Motorcycle and Scooter India. "It took Activa 12 years and four months to reach here."

Activa was launched in June 2001, at a time when most two-wheeler manufacturers were seeing a decline in scooter sales.

So, what is the reason behind Activa's success?

Guleria believes it is because of the several changes the company made to the model over the years, keeping in mind the shifting market preferences. Activa, in fact, has undergone five facelifts till now.

Analysts, however, say Activa capitalised on the growing demand for scooters in recent months. "The industry is seeing this new resurgence in the market," says Akshay Bhalla, Managing Director at consultancy firm Protiviti. "The new scooters are not what we saw as kids, but at the same time they are low on maintenance and are more durable."

Concurs Amit Kaushik, principal analyst at IHS Automotive."There is a shift in terms of over all choice of consumers. Splendor used to be a bestseller in rural India and Tier-II cities, but Activa has gone into that market because the vehicle offers greater utility."

Activa contributes 45 per cent to Honda's overall two-wheeler sales, and is growing. But Guleria is not resting on his laurels. He wants to explore new regions in India where scooters can be sold. "We want to create further sub-segment in scooters to cater to different categories of people."

Activa, though, may well have a bumpy road ahead. Hero MotoCorp, Mahindra&Mahindra, Piaggio, TVS Motor, among others, launched scooters recently. The growing competition  and the emerging demand from Tier-II cities, will force automakers to rethink their product strategy. "This kind of a shift will push them to go back to the design board," says Kaushik.

(Follow the author on Twitter: @SunnySen)

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