Scooter Diaries

MUMBAI: Mahindra and Mahindra wants to do a Scorpio in scooters.

Will it succeed?. India is the second-largest market for two-wheelers in the world, next only to China. In 2008-09, Indians bought over 7.4 million two-wheelers – motorcycles, scooters, mopeds, step-thrus and electric two-wheelers. This year, the market has so far grown at over 17 per cent. If the trend holds for the rest of the year, 2009-10 could end with two-wheeler sales in excess of 8 million. The opportunity was simply too good for Mahindra and Mahindra to resist for long. In the last few years, it has evolved from tractors to commercial vehicles and passenger cars. Two-wheelers were the only gap in its portfolio. If plugged, the company could straddle the entire spectrum of automobiles. There were advantages and disadvantages. First the negatives: The market for two-wheelers is as different from utility vehicles as cheese from chalk. And motorcycles comprise over 80 per cent of the market. The competition is cutthroat. It is not easy to gain an inch from street fighters such as Hero Honda, Bajaj Auto and TVS.
 
On the positive side, Mahindra and Mahindra is a trusted name. It has strong brand equity in rural markets which contribute 40 per cent to two-wheeler sales in the country. It has a wide distribution network in place. Most important, it has done a successful transition from tractors and commercial vehicles to cars, though these markets have nothing in common. The Scorpio is the largest-selling sports utility vehicle in the country. So, its ability to sell two-wheelers cannot be doubted. Still, Mahindra and Mahindra did not want to leave anything to chance. It touched base with 7,500 respondents across the country last year to check if the foray into two-wheelers made sense. Most of them said that a Mahindra two-wheeler doesn’t sound outrageous. That gave the company the confidence to roll out its two-wheeler plans. First off the block is its range of gearless scooters. (Motorcycles will have to wait till next year perhaps because the company does not want to rush to the market with a me-too product.) But the scooter market is no less competitive. At one stage, it was on oxygen. Stylish and fuel efficient motorcycles had more or less killed the market for scooters. So much so, market leader Bajaj Auto decided to vacate the space. But the market has bounced back in the last few years because of two reasons: One, scooters now offer mileage that is not very different from motorcycles; and two, scooters require lesser maintenance than motorcycles because they are used in large numbers by women who are cautious drivers. Honda leads the pack with a market share of 53 per cent, followed by TVS (21 per cent), Hero Honda (14 per cent) and Suzuki (8 per cent).
 
Mahindra and Mahindra’s share is a tad above 2 per cent. The incumbents have worked hard to cement their positions. Honda can boast of superior mileage and style. Hero Honda has positioned itself as the scooter for women with a campaign that featured Priyanka Chopra. TVS has gone for a similar position with Sania Mirza as its brand ambassador. Suzuki has projected itself as a product for the whole family. There aren’t too many models in the market place, yet differentiation is a must for survival. Mahindra and Mahindra has positioned its scooters, a portfolio of three (Mahindra Duro, Mahindra Rodeo and Mahindra Flyte), as power scooters. “With their international appeal and powerful performance, our world-class scooters will extend the Mahindra and Mahindra DNA of ‘tough and rugged’ style to a whole new consumer segment,” says Mahindra and Mahindra Vice-chairman and Managing Director Anand Mahindra.