With 25% market share, premium scooters now driving sales

Published: January 22, 2019 12:47:16 AM

Premium scooters cost 10-20% higher than mass-market scooters and have 10-20% lower fuel economy.

With 25% market share, premium scooters now driving sales

By Kritika Arora

While competition in the premium scooters segment is hotting up, the segment itself is emerging as the potential breadearner for manufacturers. Premium scooters now account for 25% of the overall sales of scooters.

Till July 2017, the segment’s share was a just 10%. During the first nine months of FY19, scooter sales showed a tepid growth of 5% year-on-year (y-o-y), but the premium segment (engine size of 125cc and above) grew a staggering 74% y-o-y albeit on a smaller base.

More importantly, the dynamics among the premium scooter makers is taking interesting turns, as there have been multiple launches recently. According to Jefferies, TVS Ntorq which was launched in February 2018 is now the likely No. 2 premium scooter in the pecking order with 4% share in overall scooter sales, and this it achieved without eating into the share of TVS Motor Company’s another product in the segment, Jupiter. However, “the next few months will be the key; if Ntorq can retain 4-5% share beyond 12-15 months, it could be the next ‘success’ for TVS,” said the research firm in a report.

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The leader in the premium scooter segment continues to be Suzuki Access with 35-40% share in the segment and 8% share of the overall scooter sales. Apart from Access and Ntorq, premium scooters available in the market include Honda Grazia, Hero Desini and, Piaggio’s Vespa and Aprilia SR150.

Premium scooters are more powerful, cost 10-20% higher than mass-market scooters and also have 10-20% lower fuel economy. Boosted by gains made in the premium segment, overall scooter sales of Suzuki Motorcycle and TVS Motor expanded by 43% and 19% y-o-y, respectively, in the April-December 2018 period, whereas market leader Honda Motorcycle and Scooter India grew a tepid 3%.

Honda sells premium scooters – Grazia and Activa. Hero MotoCorp, which did not have any offering in the segment until October last year, started to loose market share and de-grew by 13% y-o-y. “Although Hero did make an entry in the segment with the launch of Destini 125 in October last year, it will take another 6-9 months (to have a clear picture) if it will help Hero establish its brand in the segment or not,” analysts at Jefferies noted. Hero has lost its market share this year as Maestro Edge has slipped from 8% to 4%.

According to the research firm’s estimates, while growth in sales of premium scooters has remained above that of non-premium scooters consistently since September 2016, the divergence has become more pronounced during the current financial year.

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