The Hindu Business Line : Ungeared for growth

The gearless scooter segment is seeing a spate of launches. These vehicles make up 80 per cent of scooter sales and most of the customers are women. More churn is expected with Hero Hondo too entering the market.

Bollywood actor Priyanka Chopra at the launch of Hero Honda's exclusive women's outlet, `Just 4 Her', along with the company's latest offering, Pleasure, a gearless scooter, in Delhi.

IF the boom in the bikes segment was driven by macho young men vying to establish a trendy and with-it image, decades later it is confident young women who are driving a surge in yet another segment altogether.

Buoyed by demand from college girls and housewives, the gearless scooter segment has emerged as the second largest category in the two-wheeler segment, after bikes. In fact, some estimates suggest that while gearless scooters account for 80 per cent of total scooter sales (about 10 lakh units per year), about 60 per cent of the customers for gearless scooters are women. This would imply that about 4.8 lakh scooters are sold to women every year!

Little wonder then that two-wheeler manufacturers are fast revving up their strategies to tap this growing segment.

Hero Honda, for one, has adopted an entirely women-oriented positioning for its first launch in the segment. The company has launched the Hero Honda Pleasure, a 100 cc gearless scooter, and is targeting a market share of 10 per cent.

"The scooter segment in India is over one million units and has been witnessing an impressive growth for the past few months. Further, there is a huge untapped segment of women customers, which offers immense growth potential. With this launch, we are now ready to extend our products and services to this vast customer profile," says Pawan Munjal, Managing Director, Hero Honda.

By the end of this year, sales of Pleasure are expected to touch 1.2 lakh units.

The company has taken its strategy a step further by opening exclusive women's outlets called `Just4her.' Hero Honda is planning to open 22 such outlets for Pleasure across the country. These outlets will offer special facilities to women customers and have female service supervisors and sales executives.

Market analysts point out that the Pleasure will compete directly with the Honda Dio from Honda Motorcycle and Scooter India (HMSI). It is priced about four per cent lower than the Dio. But whether the women-oriented positioning will work in Hero Honda's favour is a moot point.

While Francis Xavier of Francis Kanoi Marketing Planning says it is a smart move to position the Pleasure for women, he's not sure whether the strong male association with Hero Honda will work against it. The two-wheeler maker has a strong motorcycle-and-male association, all its products being targeted at men so far.

Haruo Takiguchi, President and CEO, Honda Motorcycle and Scooter India, at the launch of Honda Activa in Bangalore.

While the Pleasure is targeted at women buying into the scooterette segment, which TVS Motors dominates, Xavier feels that the Pleasure, being a heavier scooter, could well end up eating into the Activa (HMSI's ungeared scooter) segment. The Activa is heavier than the 75 cc Scooty Pep.

TVS Scooty Pep

More than 50 per cent of Scooty buyers are women. While both men and women are buying Activa, the Pleasure's distinct positioning as a women's scooter could well alienate a male buyer who may have bought this scooter otherwise, says Xavier.

Bajaj Auto too is taking entrenched players TVS Motors and HMSI head on, with two launches in the gearless scooter segment later this year. The company recently unveiled two gearless scooters, Kristal and Blade, and is trying out a new strategy with gender-exclusive products.

The Kristal, which sports a sub-100 cc engine, is meant for college girls and sports the dual twin spark ignition system, a wider seat and 22 litres of storage space. The Bajaj Blade is designed to attract young men. It has a sportier style, large 12-inch alloy wheels and disc brakes. Company officials said both the launches are aimed at tapping the growing gearless scooter market.

Pune-based two-wheeler major Kinetic Engineering too is all set to fire away with new launches this year. Says Sulajja Firodia Motwani, Joint Managing Director, Kinetic: "The future will clearly belong to gearless scooters. Much innovation will be seen in terms of product design and specifications and new segments will emerge. The gearless scooter segment has been growing at 15-20 per cent annually. Gearless scooters have become popular based on their strong comfort-convenience proposition.

A file picture of Sulajja Motwani, Joint Managing Director, Kinetic Engineering, with the 110cc scooter `Zx Zing' in Hyderabad.

"Features such as electric start, smooth gearless transmission and storage space set them apart from all other two-wheelers in terms of utility; and also make them universal in their appeal, i.e., both men and women can easily use them. Even in terms of age group, they have a 16-61 appeal. They are especially popular in cities and other urban areas."

Kinetic will soon launch Italjet's range of scooters in the market. The Italiano series includes a range of designs from classic and retro to maxiscooters and sportscooters and will feature engine capacities from 50 cc to 250 cc.

"The first launch will be a large, powerful, macho scooter, of course, with electric start and variomatic transmission. This will be the most solid and comfortable vehicle in India," says a gung-ho Motwani.

Further, industry watchers say even Japanese company Yamaha, which has been conducting a feasibility study of the scooter market, may start selling gearless scooters before the year-end in India.

The rumblings in the scooter market this year are sure to affect the sales of current market leader, HMSI. The company has been credited with spearheading and developing the gearless scooter category in the country with Activa and Dio. Though no official confirmation was forthcoming, there are reports that HMSI may launch another scooter towards the middle of the current year.

"I feel HMSI had a very big role to play in reversing the trend in the category with Honda Activa. The key strategy that appears to have clicked with customers is styling - more modern, up-to-date and bordering on unisex. It also provided the convenience and pricing which was quite appropriate for consumers to see value for money. HMSI's current product portfolio is adequate. However, it needs to maintain the excitement around its product portfolio by continuously introducing new products and styling options in its portfolio," says Anang Dev Jena, Head, Synovate Motoresearch India.

Jena says there will be substantial investments in this category as manufacturers have realised the potential in this segment.

"I won't be surprised if gearless scooters garner 25-30 per cent market share of the two-wheeler market in the next three years. This is likely to come both from eating into the current scooter/ moped shares and also the growth of the segment," he says.

Surely, with a multitude of launches planned, the gearless scooter segment is set for a smooth drive this year.

More Stories on : Insight | Market Shares | Two/Three Wheelers | Gender | Hero Honda Motors Ltd

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