Honda Activa has been stuck at the top of the charts for a record six consecutive months, effectively beating former partner, Hero MotoCorp's Splendor, which is the country oldest and was once its largest selling two-wheeler. Women riders, urban young and commuters are powering the brand's rise, helping it beat rivals and break the monopoly that motorbikes have had in the two-wheeler market in the country for decades. STEPPING ON THE GAS Activa competes with Splendor in the two-wheeler category. Both are targeted at women, urban commuters and young riders Activa sold 1.33 million units during January-June 2016, beating Splendor every month for the last six months Scooters dominate the two-wheeler market currently, outselling motorbikes by 100,000 units
Activa sold 1.33 million units during the January-June period this year as against 1.23 million units by Splendor. The ride to the top has meant developing a slew of features for urban commuters, women riders and young bikers while creating a brand that appeals to a community that has long held a deep fascination for motorbikes. Scooters are the best selling two wheelers in the country today with a lead of over 100,000 units over motorcycles.
One of the key factors fuelling Activa's ride up has been the brand's ability to connect with women riders. Yadvinder Singh Guleria, senior vice president, sales and marketing, Honda Motorcycle and Scooter India said, "The superior convenience, unisex appeal coupled with product features has converted millions from pillions to riders."
Since first racing ahead in September 2013, Activa has beaten Splendor several times. However this latest dominance is the longest unbeaten streak. Last financial year Activa sales stopped just short of Splendor, 2.46 million units compared to 2.48 million units. But this year, the story is set to be very different.
Hero states that it is not dependent on just the Splendor for growth. But at the same time, it is bolstering the brand. "The recent launch of Splendor iSmart 110, our first motorcycle to have been completely designed and developed in-house, is set to further strengthen the franchise," said a company spokesperson.
Hero is not dependent on a single brand the company says. "Over the past few years, we have built an expanded portfolio across segments. In addition to Splendor, two more Hero motorcycles, Passion and HF Deluxe, sell over a million units annually," said the spokesperson.
Still, Activa's dominance has rattled all the players. Not just because it raced to the top, but that it has managed to hold on to the position. Activa fought the battle on many fronts - affordability was a big factor since it was targeting young and first-time riders. At the same time, it needed to look at utility and design, both major decision-making factors for the generation.
With convenience in mind, the company introduced under-seat and front storage, mobile phone charging and other such features on the scooter. It also appealed to women riders with what it calls unisex looks. "A lot of scooter buyers today are women or male members buying for women. Motorcycles do not offer the same convenience or comfort levels as a scooter," said an analyst based in Mumbai. Honda managed to strike a chord here and today, a significant number of Activa riders are women.
Its big success also has been in convincing the young that the scooter is a cool ride. Figures until the end of June show scooters have a share of 30 per cent in the two-wheeler segment. This was 17 per cent just five years back. The scooter segment grew by 27 per cent to 1.37 million units during the period April-June 2016 as compared to 9 per cent growth and 2.95 million units for motorcycles in the same period, according to Society of Indian Automobile Manufacturers (SIAM).
Activa's growth has eaten into the economy bikes (100-cc engine) market especially in urban areas where scooters are preferred for their easy drive-ability on congested roads and greater utility. Motorcycles like Hero Splendor, which are priced lower than Activa, claim to offer greater mileage but that does not seem to impact the scooter buyers' decision yet. As per SIAM, Honda enjoys a lion's share of the domestic scooter market at 58 per cent at the end of June followed by Hero at 15 per cent and TVS Motors at 13 per cent.
A report from Credit Suisse stated, "Past five years, the share of scooters has increased from around 20 per cent to around 30 per cent and in the same period the share of lower executive bikes (around Rs 50,000 price, same as scooters) has shrunk from around 35 per cent to around 25 per cent."
Activa has also gained from the company's decision to extend the brand into different variants with different engine capacities. From a 100cc engine in 2001, it is now available with 110cc and 125cc engines. The three models Activa 125, Activa 3G and Activa i are all popular, but the Activa 3G is the single largest selling scooter in the country.
Many two-wheeler companies are riding the scooter wave today. Honda, Yamaha, TVS, Hero and Suzuki have launched products in the category and the share of scooters in some markets is already 40 per cent. Analysts expect the pan-India share to jump to around 40 per cent in the next few years as potential consumers of entry level bikes will continue to shift towards scooters. For Activa, the ride seems to be getting smoother.