Honda Activa: A Real Game Changer in India’s Scooter Market

Becoming successful is not a random occurrence. Being prepared is key when opportunities arise; this was also true for Honda, a business that revolutionized the motorcycle industry. Introduces gearless four-stroke scooters to the market. The company is captivated by the incredible growth. The majority of participants were suspicious of the community's decision to jump on the bandwagon and usher in a new era in the car industry as the scooter market crashed and burned, but eventually, businesses caught on. Because of the lackluster reception it received, Bajaj Automobiles—the pioneer in the scooter industry in India—decided to put it out of business. Honda iActiva eventually became just another generic scooter brand. Rivals benchmarked Honda Motors' marketing strategies when they snatched on those strands and turned the mystery into a gold mine. The version of gearless scooters that has been extremely successful. Activa is now the best-selling two-wheeler globally, surpassing even the legendary Splendor in terms of sales. The complaint seeks to shed light on Honda's plans by investigating the causes behind the company's meteoric rise.

The Prometheus
An Enduring Foe
Striking Positively Rural Market Unexpectedly

The Prometheus

Consumer preference shifted from scooters to motorcycles, putting the scooter manufacturer in a tough spot after they had positioned themselves as the official mode of transportation for the Indian middle class. The idea that motorbikes will eventually rule the market and that scooters will occupy a supporting role began to take root. Bajaj Auto's announcement that it will be leaving the scooter industry to concentrate only on motorcycles effectively clinched the deal. With an explicit agreement with its former partner Hero Moto Corp, Honda launched its wholly-owned company in 1999 with the sole intention of concentrating on the autonomous scooter market and delaying the production of competing motorcycle goods until a much later date. After the joint venture dissolved in 2010–2011, the two companies were free to compete in their own markets, albeit with distinct areas of expertise. Hero Group became the biggest two-wheeler producer in the world, dominating the motorcycle category. In the four-stroke automated scooter business, Honda Motorcycle & Scooter India Pvt. Ltd. (HSMI) became the leader, with Activa sharing a lion's share of the market, and capturing over 60% of the market.

Activa is as dominant in the scooter sector as Hero Splendor is in the motorbike market. Through its gender posture, Activa was able to redefine the way the industry perceived the scooter business and tap into an entirely new market.

Honda Motor Co. | Automobile Multinational Company | Company Profile |

Founded by Honda Soichiro, Honda engages in the manufacture and sale of automobiles, motorcycles, and power products. Know more about its business model etc

StartupTalkySarika Anand

An Enduring Foe

Scooters' market share increased from 11% in 2009 to 30% in just a decade, and they show no signs of slowing down. Scooters dominated the minds of the Indian middle class for a long time, but when technology improved, motorcycles became the preferred mode of transportation for the country's youth, leaving a noticeable gap. Scooters were more in line with the idea that mobility was defined by one's personality, whereas motorcycles represented the mobility of the people.

Scooters were more popular than motorcycles because of the increasing number of working women who valued convenience more than speed. Scooters also scored points for their excellent fuel economy, which was a selling advantage for buyers in both urban and rural areas. Customers thought Activa was a simple product.

It may be utilized with relative ease by every member of the family for local tides. Gearless scooters didn't do well at first, but they started to catch on in subsequent years. Others were captivated by Activa's success and entered the scooter sector as well. These included TVS, HeroMotoCorp, Yamaha, Piaggio, and Suzuki.

Compared to 1,224,379 units sold in 2011–12, HMSI's scooter sales exploded to 3,189,102 units by the end of 2016–17 (SLAM). During the same period, sales of TVS scooters increased from 496,892 units in 2011–12 to 826,291 units.

In 2017–18, Hero Moto Corp.'s sales increased from 414,389 to 789,974 units, a nearly 100% increase (SIAM).

Sales of two-wheelers, of which scooters are a major part, surpassed the astonishing 20 million unit milestone, according to a SIAM report. In comparison to the same period in 2017, sales of two-wheelers increased by 14.80 percent in April–March of 2018.

Striking Positively Rural Market Unexpectedly

The demand for scooters in rural areas has exceeded all expectations, challenging the concept that they would only be popular in metros and big towns due to the small wheels and poor road conditions in India. Tuff Up Tube, a unique feature given by Honda, is a double-layered tube with a sealant that prevents tire punctures. This is one reason why demand from the rural market increased. This allowed them to address the issue of poor road conditions and high maintenance costs for two-wheelers, which were concerns of their rural clients.

The fact that Honda didn't dabble in anything else than scooters was a major contributor to their meteoric climb to fame.

While the rest of the car industry was busy diversifying its offerings in 1990, Honda was bound by a contract with the Hero group to avoid the motorcycle business and instead concentrate on improving the scooter market. The foundational principles of modern scooterization were the driving force behind their dealer partnerships, design refinement, attempts to appeal to products with unisex appeal, etc. The gradual incorporation of scooters into ASEAN culture also helped their case gain traction.

Honda was so encouraged by the early success of Activa that it released two more scooter models, the DIO, and the Eterno, in a very short period. It didn't take long for Honda to make its dominance in scooter production and send a message that it meant business in the scooter industry. Honda resurrected the scooter market and captured over half of the share by year's end 2005.

FAQs

Is Honda a Japanese company?

Honda Motorcycle & Scooter India, Pvt. Ltd., abbreviated as HMSI, is the wholly owned Indian subsidiary of Honda Motor Company, Limited, Japan.

Which is the best-selling scooter in India?

The Honda Activa stands as a top contender among scooter sales in India, owing to its unmatched convenience, efficiency, and practical design. These qualities are the driving forces behind its widespread popularity.

How many HMSI scooters were sold in 2016-2017?

Compared to 1,224,379 units sold in 2011–12, HMSI's scooter sales exploded to 3,189,102 units by the end of 2016–17 (SLAM). During the same period, sales of TVS scooters increased from 496,892 units in 2011–12 to 826,291 units.