Six years after the launch of Eterno, Honda Motorcycle and Scooters India (HMSI) has decided to phase out the vehicle, courtesy falling demand for geared scooters in the country.

Instead, the company has come up with a new 110cc Honda Activa, a gearless scooter, to garner a bigger market share in the scooter segment in India.

?Demand for geared scooters has been declining and so is our sale of Eterno. Consequently, the company has decided to phase out the vehicle and will focus on ungeared scooters, including the Aviator and the new Activa launched today,? said Shinji Aoyama, president and CEO, HMSI. The new Activa is priced at Rs 39,800 (ex-showroom, Delhi).

In 2008-09, sales of Eterno had come down to as low as 40,000 units a year, compared to 40,000 Activas every month. According to the Society of Indian Automobile Manufacturers, the scooter market in India was at 10,50,109 units in 2007-08, compared to 9,40,617 units in the previous fiscal, a growth of 11.6%.

HMSI is eyeing an 18% growth in total sales in 2009-10 at 12.5 lakh units, compared to an estimated 10.6 lakh units that will be sold by HMSI by the end of 2008-09.

HMSI is currently the leading scooter manufacturer in the country. It had a market share of 57.7% in February, and was followed by TVS Motor at 18.7% and Hero Honda at 15.3%.

?We are aiming at further expansion of the scooter market with the new Activa and have set a target of selling 5.5 lakh new Activas in 2009-10,? said NK Rattan, head (sales and marketing), HMSI.

He added that higher sales will come through an increase in the sales network, as the company plans to add 100 outlets in 2009-10 to take the total number of outlets to 750.

Honda forayed into the Indian market in 2001 with Honda Activa, followed by Dio in 2002 and Eterno in 2003.

Aviator, another gearless scooter from HMSI, was launched at the Auto Expo in January last year.