Scooters gear up for a rural push

Scooters, largely considered an urban phenomenon, are seeing increasing acceptability in rural markets as well. Improving road network is one of the major triggers for growth in scooter sales in such markets. An above-normal monsoon this year after two consecutive years of deficit rainfall is also expected to support the demand for two-wheelers, including scooters.

“The rural perception towards scooters is changing. In states with a high agrarian base the share of scooter (sales) is constantly moving up. These states were earlier mostly a market for entry level motorcycle,” said Y S Guleria, senior vice president (sales & marketing) at Honda Motorcycle and Scooter India, which enjoys a 55% share in the domestic scooter market. A total of 5 million scooters were sold in the country last year, up 12% from FY15. Scooters now form 30% of the domestic two-wheeler market.

In Uttar Pradesh, the country’s most populous state and which has a large rural population, the share of scooter sales for the industry is estimated to have increased to 15% in FY16 against 12% in FY15, said Guleria. For Honda, about 15% of its 2.78 million annual scooter sales come from rural markets.

At most dealerships in rural areas, two of every 10 two-wheelers sold are now scooters, against just one a couple of years ago, according to Honda. Improved road network and mileage are seen as the main booster. 

“Customers buy (a) scooter for its functionality and ease of use. And this is a behavioural pattern across geographical divides of urban and rural. The demand curve for scooters, therefore, is skewed towards regions/states that are witnessing rapid infrastructural development. With our two new products - Maestro Edge and Duet - we are working to increase scooter share across the country,” said a Hero MotoCorp spokesperson. 

According to government data, an average of 91 kilometres of rural roads has been built daily during 2015-16, leading to a total addition of 30,500 km in rural road length. About 6,500 habitations have been connected in the last year. For speeding-up of the process of road construction, an allocation of Rs 27,000 crore has been made for Pradhan Mantri Gram Sadak Yojna (PMGSY) in the last Budget.

Suresh Babu, national head (marketing and product planning) at Suzuki Motorcycle said the rural population is seeking a convenient mode of commuting which gearless scooters offer. “We recenetly launched our new scooter, the Access 125 and we have got orders from dealerships which never used to sell scooters, especially in traditional motorcycle markets like Uttar Pradesh,” Babu said.

The Indian Meteorological Department has forecast an above normal monsoon in the current year. This is expected to boost farm productivity and improve the rural purchasing power. “More people will experiment with scooters in the rural markets,” said Guleria.