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Scooter sales riding on rural demand

G Balachandar Chennai | Updated on February 08, 2021

Two-wheeler companies have witnessed revival of growth in scooters in the past few months   -  The Hindu

Better roads, job prospects and launches reviving growth in the two-wheeler segment

The much-awaited ‘scooterisation in rural areas’ appears to be finally happening as an increasing number of people there have started to prefer automatic scooters.

While rural centres always preferred motorcycles, most of the scooter volumes have been contributed by urban cities. Of late, scooters have found acceptance in the rural areas and has emerged utility vehicles.

Key factors

“Now, rural road conditions are good. Also, growing income levels and more job opportunities in Tier-2, -3 and -4 towns have attracted educated female population from nearby villages to take up employments.

“They are all now buying automatic scooters due to convenience and other benefits. The number of buyers from rural areas has been increasing,” said a Tier-3 town (Tamil Nadu) dealer of leading two-wheeler company.

Two-wheeler companies have witnessed revival of growth in scooters in the past few months after the opening of urban centres on the back of huge drop in number of Covid-19 infections. Driven by pent-up buying, scooter volumes have been growing and sales are expected to accelerate in the coming months due to new model launches, gradual reopening of schools and colleges.

“At the same time, we expect scooterisation to make further inroads into rural geographies on account of new motor-able roads and the superior advantage of co-usage that only scooters offer at a time when the need personal mobility is on the rise.

“Acting as the tailwind to this are the new improvements in scooter design such as increased ground clearance, better mileage, more advanced telescopic forks etc. which make scooters more relevant than ever for rural roads,” said Yadvinder Singh Guleria, Director – Sales & Marketing, Honda Motorcycle & Scooter India.

Crisil Research’s Director Hetal Gandhi said scooters were positioned primarily as an urban vehicle (current urban share of scooters at 65-70 per cent of overall demand) and was targeted to the male customers earlier.

“Now, it has gradually evolved to become a preferred way of commute for the urban and rural female buyers. Scooters are expected to witness higher penetration in the rural market in the medium term. This is due to a ramp up seen in road construction over the last few years.

“Moreover, OEMs are gradually expanding their distribution network in rural areas, making scooters available to the rural consumers,” she added.

A recent Frost & Sullivan report expects scooter contribution to overall industry to grow sharply from current 29 per cent to 36 per cent by FY25, and projected scooter contribution to reach 40 per cent level by FY30. Rural markets are also expected contribute to this to rise during this period.

Published on February 08, 2021

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