Even as the scooter segment has been seeing a gradual recovery, the premiumisation trend is gathering strong momentum in the segment. Though the 110cc segment is quite a large category in the scooter market, the 125cc scooter market has been seeing action in the past several months in view of the growing customer shift towards higher-powered scooters.

As customers in the segment aspire for more power and better riding experience in scooters, two-wheeler makers have been coming out with new 125cc scooters and variants, packed with a range of features, from time to time. This has only accelerated in recent times. It is estimated that a little over a third of volumes in the scooter market comes from 125cc scooters, up from about 20 per cent three years ago. With the evolution of customers in the 125cc segment, in particular, young buyers, this market is expected to see better growth in cities.

“As a natural progression, once there is a general acceptance and demand for the category, it leads to a sub-segmentation with evolving customer needs. Especially after the introduction of BS6 norms, the new technology allowed us to introduce advanced features at a new price proposition to the customers. The advanced technology has brought a transformation in the segment and, at the same time, upgradation & premiumisation is aided by the increasing penetration of retail finance for growth of 125cc scooter segment,” Yadvinder Singh Guleria, Director, Sales & Marketing, Honda Motorcycle & Scooter India Pvt. Ltd told BusinessLine .

The big players

While Honda is the top player in the entire scooter market, TVS Motor is the second big player. Recently, TVS Motor launched its 125cc Jupiter to further strengthen its position in the segment, while a few weeks earlier Yamaha rolled out its new sports scooter.

Honda and Suzuki have been dominating the 125cc segment, while Hero MotoCorp has also strengthened its presence. Both Suzuki and Yamaha sell only in the 125cc scooter space. “With almost all OEMs having product offerings in the 125cc category, Honda's Activa 125 and Grazia, TVS’s NTorq and Suzuki's Access and Burgman have been a few of the most-sought-after models in this category,” says Ritu Goswami, Assistant Vice President, ICRA. Meanwhile, there is another view that growing acceptance of electric scooters in cities may cause some dent in the ICE-based 110cc scooters due to price parity and high fuel prices. Hence, two-wheeler companies seek to create a buzz and excitement in the market with the launch of premium products.

However, two-wheeler makers say it is too early to form an opinion on the impact of electric scooters.

Top scooter maker Honda says that while other segments will grow, the mass segment continues to drive significant volumes at present. “By and large, 110cc scooters attract a diverse target audience ranging from college students, office goers, traders, and self-employed to the older generation with wider acceptance & unisex appeal. The user profile reflects the unique diversity & equality across different geographies of our large country. Now with electric vehicles entering the two-wheeler landscape, there are certainly new growth avenues. However, it is too early to comment on any tradeoffs,” said Guleria. However, industry analysts point that improving the ecosystem for electric two wheelers will drive electric scooter sales northwards. “Over the medium term, with cost economics turning increasingly favourable for electric scooters due to - FAME and State EV subsidies and rising petrol prices, the scooter segment is expected to witness faster electric vehicle penetration,” said Goswami.