Eye new segments as volumes in bike models stagnate
Two-wheeler makers are eyeing new segments for growth as volumes in bread-and-butter bike models stagnate. Encouraged by the strong growth seen in scooters for the last few years, market leader Hero MotoCorp and TVS Motor Company are giving birth to an entirely new hybrid scooter segment with models ready for launch in the next nine to 12 months.
Scooter sales have grown 18% (to 2.17 million) in April-December FY13, while bikes, which account for 73% of two-wheeler volumes, saw flat growth in the same period.
Hero’s Leap (shown in the Auto Expo 2012) and TVS’ yet-to-be-named hybrid scooter are expected to be the first two models, and later be joined by models from Honda, Yamaha and Suzuki. To keep pricing close to conventional scooters (R45,000 - 50,000), they hope to utilise government subsidies that are likely to be announced around April this year under the ‘National Electric Mobility Mission Plan 2020’. Prime Minister Manmohan Singh had unveiled the electric vehicle plan earlier this month.
“TVS and Hero are showcasing hybrids in their initial stages of development and they are likely to hit the market in the next nine to 12 months. Being an early starter will give them an advantage. In February, we will send our funding requirement to the finance ministry for their approval and hope to announce the subsidies from April 1,” a senior government official told FE.
Though hybrids promise much lower running costs because of extremely low fuel use, the use of two powertrains (both electric and petrol engines) pushes the price up by 20-30% (R10,000) over conventional petrol models. Hybrids are similar to electric scooters in their use of an electric motor for power, but the difference is in an additional small petrol engine that charges the battery and negates the need for external electrical power source.
Venu Srinivasan, chairman and MD of TVS Motor Corp, said that there is a huge need to shift to electric and hybrid vehicles in order to reduce the rapidly rising pollution levels in cities like Delhi. But, the shift to electric/hybrids makes