Posted On : 12 Jan, 2019
New Delhi, January 12, 2019 : India’s love for scooters seems to be declining, with high fuel prices and higher insurance costs putting off urban buyers. After leading the two-wheeler segment for more than a decade, scooters have given way to motorcycles, which posted a faster pace of sales growth in 2018, driven by rural demand.
While motorcycle sales grew by a vigorous 15% to 13.78 million units, scooter sales increased by 9% to 6.95 million units, according to industry data. This helped overall two-wheeler volumes in the local market breach the 20 million mark for the first time, growing 13% to 21.6 million units last year.
Experts said urban buyers are postponing plans to buy scooters due to the rise in the cost of ownership. “Unlike motorcycles, which are used for daily commute by small businessmen and farmers in rural areas, scooters are family vehicles,” explained Ashish Kale, president of the Federation of Automobile Dealers Associations. “Scooters are more often a second two-wheeler used by the women in families in urban areas. With fuel prices and insurance costs increasing last year, many such buyers put off discretionary purchases, slowing down scooter sales.”
The double-digit growth in sales volumes helped motorcycles reclaim the market share it had lost out to scooters. The share of motorcycles in two-wheeler sales shot up to 63.8% in 2018, the highest level in three years. The share of scooters narrowed to 32% last year from 33.4% in 2017.
Motorcycles have been getting back on a strong growth path on the back of various drivers, including farmers getting higher prices for agricultural produce, strong rural demand and the availability of attractive models, according to a spokesperson at Hero MotoCorp.
Honda Motorcycle & Scooter India and TVS Motor Company did not immediately respond to queries from ET. The share of the scooter segment had widened steadily from 27% in 2014 and it was only last year that there was a decline.
“Scooters are mainly an urban phenomenon. With most large cities now commencing operations of metro rail, scooters may also be facing a challenge on account of a shift to public transportation systems,” said VG Ramakrishnan, managing partner at Avanteum Advisors LLP, an automotive advisory company.