India Gasoline Scooter and Motorcycle Market Overview
The Indian gasoline scooter and motorcycle market attained a size of $22.0 billion in 2017 and is forecasted to reach $42.4 billion by 2025, registering a CAGR of 8.8% during 2018–2025. The major factors driving the market growth are rising income levels and growing demand from tier 2 and tier 3 cities.
INDIA GASOLINE SCOOTER AND MOTORCYCLE MARKET, BY PRODUCT, ‘000 UNITS (2013–2025)
Both these vehicles use gasoline as a fuel for vehicle propulsion, have two wheels, and are much smaller and lighter when compared to passenger cars. This makes them a good option to ride on crowded and congested roads, especially in a country like India. Unlike a scooter, motorcycle does not have a floorboard to rest the feet, instead, the rider rests his feet on the protruding foot-rests on the vehicle. Another difference between a scooter and a motorcycle is that the engine in a motorcycle is usually attached to the frame, while in a scooter, engine is usually a part of rear suspension. Motorcycles are often heavier and more powerful than scooters.
Motorcycle was the larger product category in the Indian gasoline scooter and motorcycle market, with more than 65.0% revenue share in 2017. Its larger share is attributable to the increasing number of motorcycle sales registered in the country. For instance, motorcycle ownership rate is fairly high in the country, at 108 motorcycles per 1,000 population.
The sales of motorcycle category in the Indian gasoline scooter and motorcycle market is increasing due to its cheaper purchase and operating costs. For instance, Hero MotoCorp Ltd stated that it still sells significantly more motorcycles than scooters. This is so because a large demand for motorcycles comes from the rural markets, where the adoption of scooters is though growing, but still not as high as motorcycles.
India Gasoline Scooter and Motorcycle Market Dynamics
India is among the fastest growing economies in the world, characterized by rising per capita income and growing middle class population. The rising income levels have strengthened the purchasing power of individuals, due to which a large number of people in the country are able to afford private vehicles; benefiting the Indian gasoline scooter and motorcycle market. Factors such as easier financing options, fuel-efficient models, and heavy discounts on these vehicles are further motivating individuals to purchase these vehicles.
In addition, a large number of people are purchasing two-wheelers for shorter commute despite having personal cars, as scooters and motorcycles are easy to drive and park in congested areas. As a result, two-wheelers are rapidly emerging as a second vehicle in Indian households. Thus, with the growing economic prosperity and income levels in the country, the Indian gasoline scooter and motorcycle market would continue to grow during the forecast period.
In the recent past, stringent emission norms in India has affected profit margins of the companies operating in the Indian gasoline scooter and motorcycle market. The country has seen, fuel quality standards being designed and implemented for controlling the emissions arising from such vehicles. For instance, over last decade, India undertook extensive efforts to curb emissions by introducing two-and three-wheeler emissions standards with limits for carbon monoxide and hydrocarbons, tightening the emission limits.
These emission norms have undoubtedly reduced the pollution levels in the country, however, have also negatively impacted the profit margins arising from gasoline sales. For instance, the implementation of two-and three-wheeler emissions standards led to the disappearance of two-stroke motorcycles from the market, in the last 20 years. However, two-stroke models were still produced for some mopeds (50 cc or smaller engines), which account for a small share of the two-wheeler vehicle’s market. Hence, stringent government norms adversely affect the profitability arising from gasoline sales, thus hampering the Indian gasoline scooter and motorcycle market growth.
India Gasoline Scooter and Motorcycle Market Competitive Landscape
Some of the major players operating in the Indian gasoline scooter and motorcycle market are Hero MotoCorp Ltd., Honda Motorcycle and Scooter India Pvt. Ltd, Bajaj Auto Ltd, TVS Motor Company Limited., Yamaha Motor India Pvt. Ltd., Royal Enfield Ltd India, Suzuki Motorcycle India Pvt. Ltd., Mahindra Two Wheelers Limited, KTM AG, and Piaggio & C. SpA.