The Hindu Business Line : Bajaj scoots off, others remain upbeat

Even as Bajaj Auto announced its departure from the scooter business on Wednesday, other players found "plenty of opportunities for growth" in the segment.

While the company that created the segment has decided to exit, players such as Mahindra stepped in recently. This signifies that India's tryst with scooters, symbolic of middle-class aspirations and dreams, is not to be buried just yet.

Bajaj's decision to shift focus towards motorcycles may be with good reason. A look at its performance in the segment shows why - between April-November Bajaj's scooter sales dropped 57 per cent. However, it remained the second largest bike maker with sales growth of 12.4 per cent at 1,085,785 units.

Compare this with the market leader in scooters, Honda Motorcycles and Scooters India (HMSI). It posted a modest growth of 1.2 per cent in the eight-month period, while retaining its above 50 per cent market share. Meanwhile, TVS Motors, the second biggest player, captured a 23 per cent market share.

According to Ms Supriya Khedkar, Auto Analyst, ICICIdirect, the scooter market now caters mainly to women. "It has shifted from being a family vehicle to a female-oriented vehicle. Bajaj's focus shift on bikes, and especially high-end ones, came after Mr Rajiv Bajaj took over. The segment has higher margin and higher value," she said, adding that the motorcycle market should grow 17-18 per cent for the fiscal.

Mr Venu Srinivasan, Chairman and Managing Director, TVS Motors, felt that the scooter market is here to stay. "The scooter has its own segment of buyers in towns. Our products focus more on women. Although the motorcycle market will grow faster, scooters should continue to grow at 10-12 per cent," he said adding that TVS will soon launch the 110cc `Wego'.

HMSI too has increased its capacity at the Manesar plant. "The scooter segment is expanding more than motorcycles and will continue to grow. We will launch new models if demand arises," said Mr Shinji Aoyama, HMSI President and CEO.

Related Stories:
Bajaj decides to ride out of scooter market
Bajaj Auto plans gearless scooter

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