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17 April 2013, 09:40   Report Abuse

Riya Saha.......

CEO



[ Scorecard : 604]


Scooter sales hit speedbreaker after 4 years

 

 

It was once the darling of the two-wheeler industry. But the ongoing slowdown has managed to rob the scooter market of much of its shine. Scooter sales have registered a negative growth rate in March, for the first time in nearly four years. 
 
The last time the segment clocked negative growth was back in October 2009 when sales dropped nearly 11%. The March 2013 drop of 3% isn't very big given the kind of numbers the auto industry has been totting up of late. But consider this: less than a year ago, between January to May 2012, the scooter segment clocked anywhere between 27-36 % growth year-on-year. 
 
Nor was this dizzy pace the best that the segment has seen in the past four years. According to data compiled by the Centre for Monitoring Indian Industry (CMIE), the segment clocked over 52% sales growth in September 2011 and over 98% growth in October 2010. Scooter numbers have risen steadily over the past 48 months from 82,801 units in April 2008 to 2,84, 984 units in October 2012. 
 
Since then, though, at least month-on-month it has remained flat hovering in the 2,43,000-2,57,000 range. After 30% sales growth just six months ago in October 2012, the slump set in and growth was comparatively slow since then. The segment grew a mere 6.5% in November 2012, 7.2% in December and 10.1% in January 2013. February was near flat at just under 3% growth and now March is officially negative. Nor is the forecast particularly good for the industry in general. 
 
In a report, analysts from Nomura Equity Research said: "The two-wheeler industry is likely to remain weak in FY14 and we expect only 1.5% volume growth versus Siam's forecasts of 6-8 % growth." Scooters, though, should clock around 6% growth according to the report, down from over 23% in FY12 and over 14% in financial year 2013. 
 
So what has caused this fall from grace? According to Rakesh Batra, partner and national leader, automotive practice Ernst & Young, "it's probably a reflection of what's happening in the broader automotive market with consumer sentiment turning negative. 
 
Different segments retract at different rates and even within the passenger vehicle market small cars and certain mid-size models have continued to do well as have SUVs. But as the consumer sentiment turns more bearish, the negative trend catches up for nearly all segments," he explained. 

 






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