Suzuki pips Hero to become the third-largest scooter makers

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Updated: July 15, 2019 3:32:37 PM

SMIPL, a subsidiary of Suzuki Motor Corporation Japan, clocked sales of 1,67,509 scooter units during April-June quarter compared to 1,11,238 units by Hero MotoCorp in the same period.

At the end of FY19, Hero’s domestic scooter sale stood at 7,19,087 unitsAt the end of FY19, Hero’s domestic scooter sale stood at 7,19,087 units

Suzuki Motorcycle India (SMIPL) has pipped Hero MotoCorp to become the third-largest seller of scooters in the domestic market, propelled by a strong demand for its flagship offering — the Access 125.

SMIPL, a subsidiary of Suzuki Motor Corporation Japan, clocked sales of 1,67,509 scooter units during April-June quarter compared to 1,11,238 units by Hero MotoCorp in the same period.

At the end of FY19, Hero’s domestic scooter sale stood at 7,19,087 units against 6,15,520 units sold by Suzuki. In Q1FY19, scooter sales at Hero fell sharply by 41% year-on-year, while Suzuki recorded 28% y-o-y jump in domestic sales.

Hero was the second largest player in the scooter segment until 2015-16 before it was overtaken by TVS Motors in a space dominated by Honda Motorcycle and Scooter India.

While Suzuki sells three models in the scooters’ segment — Access 125, Access SE and Burgman Street — all in the premium segment, Hero has a total of six offerings for its customers, ranging between 100cc and 125cc.

Premium scooters account for 25% of the overall sales of scooters. Till July 2017, the segment’s share was just 10%.

Devashish Handa, vice-president, sales and marketing, SMIPL, credited the growth in existing markets for increase in domestic sales. “We didn’t build an inventory when the market was going strong. Our retail and wholesale growth has been consistent for more than a year now. Existing markets like Kerala, Karnataka and Maharashtra are firing for us, which reflect better acceptance for our product,” Handa told FE.

Access 125 accounts for more than 90% of company’s monthly scooter sales. The scooter costs Rs 57,000 (ex-showroom, Delhi) which is close to the price of Activa 110 and TVS Jupiter — the two bestsellers in the domestic market. While Activa costs Rs 55,000, Jupiter carries a price tag of Rs 53,000 in Delhi. Two-wheeler sales have been muted since September 2018, hit by a rise in insurance premium and subsequent price hikes taken by companies on account of new safety norms.

Manufacturers increased prices in the range of Rs 500-7,000 as they rolled out products with combined braking system and anti-lock braking system feature, mandatory for vehicles sold from April 1. Domestic two-wheeler sales that includes motorcyles, scooters and mopeds, were down 12% y-o-y to 5.01 million units in Q1FY9. Hero, the largest domestic two-wheeler maker, has launched two premium scooters in the last 10 months – Destini 125 in the commuter segment in October 2018 and Maestro Edge 125 in the sports segment in May this year. Analysts at Jefferies India had pointed out that sales of Hero’s Destini 125 could fizzle out in the coming months.

“It (Hero) faces medium-term growth and market share challenges due to weakness in high growth segments within 2-wheelers viz. scooters, premium motorcycles and exports. Recent market share loss in Maestro/scooters is a worry as initial traction in Destini 125 could fizzle out post initial 6-9 months, as is often the case with new launches,” wrote in a note on April 28.

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