Hero MotoCorp’s third 110cc scooter, the Xoom, launched in January, has failed to lift the company’s overall scooter sales.
Sales data for the April-August period sourced from Society of Indian Automobile Manufacturers (Siam), show the company’s total scooter sales grew only 2.4% from 136,010 units sold in April-August FY23 to 139,266 units this year, or just 3,256 units in absolute numbers.
If sales of its electric scooter Vida – launched in October 2022 — are added to the mix, Hero’s scooter sales growth year-to-date is 5.8%. The company sold 4,640 units of Vida in April-August FY24.
The trend is largely reflective of the overall scooter market, which grew just 3.88% from 2,191,208 units to 2,276,285 units in the same time period. But what makes matters pressing for Hero is it was betting big on the Xoom to garner a much larger share of the scooter pie.
The scooter was launched with unique features like Hero Intelligent Cornering Light, biggest and widest tyres in its segment, idle engine stop-start, and Bluetooth connectivity.
The Xoom has delivered, but at the cost of other Hero scooters, instead of attracting buyers from competitors such as Honda, TVS and Suzuki.
Model-wise sales data show that while the Xoom sold 50,843 units in April-August FY24 — at more than 10,000 per month — the company’s other scooters saw a big drop in sales. For example, sales of the Pleasure dropped 42.9% from 71,737 units to 40,957 units, those of the Destini 125 dropped 15.2% from 46,741 units to 39,657 units, and of the Maestro dropped 55.4% from 17,532 units to just 7,809 units.
According to analysts, Hero couldn’t ride the scooter wave that started with Honda Activa in the 2000s and then strengthened with TVS Jupiter and Suzuki Access. “Those days, the company focused a lot on its commuter motorcycle offerings such as the Splendor and Passion, and that investment is still paying off,” an analyst said. “Even today, Hero MotoCorp controls 78% of the sub-110cc commuter motorcycle segment – having sold 1,733,419 units in a market size of 2,209,796 units in April-August.”
But this segment is shrinking. Siam data show sub-110cc motorcycle sales dropped from 2,236,859 to 2,209,796 units year-to-date, and buyers are increasingly opting for bigger than 110cc, where Honda is the leader, in addition to scooters.
In this scenario, analysts said the company needs a ‘hero’ product that can salvage its scooter market share. “The Xoom has worked, but at the cost of the Pleasure, which shouldn’t have been the case,” another analyst said.
Even though Hero MotoCorp is a two-wheeler market leader, in scooters it’s at a distant fourth with a market share of just 6.32% — less than half compared with 13.14% clocked five years ago. It trails Honda (44.39%), TVS (24.76%) and Suzuki (15.2%). Even a much smaller two-wheeler company like Yamaha (4.98%) is hot on its heels.