TVS Motor Company, the third largest two-wheeler manufacturer in India, is understood to be developing an all-new 125cc scooter model(s), which may see rollout in the first few months of CY2017, sources aware of the development told Autocar Professional.
The Hosur-based company, which is known for its R&D strengths, is also learnt to be considering floating a new scooter brand to launch its upcoming line-up of more powerful city scooters. Four different sources, all choosing to stay anonymous, have confirmed to Autocar Professional that TVS is developing 125cc scooter models – and hence a stronger scooter portfolio – to take its game-plan a notch higher.
“TVS Motor is readying a 125cc scooter model which is estimated to be rolled out early next year. The company is treading its own steady path in developing and launching new products. The company is also evaluating the possibility of debuting in this segment (125cc) under a new brand name. However, it was expected that a 125cc scooter may get branding under the successful Jupiter name,” revealed the source.
“The Jupiter has established itself very well, and this clearly means that it will continue with its current momentum in the market. However, that is the only large selling scooter brand from the TVS stable, which means that the company will have to look at coming up with another scooter brand that could sell for them,” disclosed another source.
How the 125cc scooter market in India stacks up
With the upcoming 125cc scooter(s), TVS will mark its debut in this sub-segment, which offers higher power as compared to the more popular 110cc models. Autocar Professional estimates that the 125cc scooter category had a domestic market size of around 375,000 units, on the conservative front, in FY2016. This segment (125cc scooter category) hence accounted for a small slice of around 7.5 percent of the overall domestic scooter market in the last fiscal year.
Our analysis forecasts that the 125cc scooter segment will garner sales of 475,000-600,000 units, if not more, by the end of the ongoing fiscal. While this would mark a growth range of 27 percent to up to 60 percent year-on-year (depending upon the variations in market demand), it also clearly highlights the expanding class within the overall scooter segment.
The 125cc scooter category is currently dominated by the Suzuki Access, which has not only established the market for this class on this own over the last decade, but has also been a conventional rival to the bestselling 110cc Honda Activa. However, while the Access continues to be the most popular and segment-bestselling model, Piaggio’s Vespa range, in the 125cc class, sits atop this category with its premium pricing.
It is to be noted here that major players such as Hero MotoCorp and India Yamaha Motor remain absent in this category. Honda, on the other hand, has only one model (Activa 125) on sale in the market. A quick study among HMSI dealers reveals that the 125cc Activa is yet to make its mark among buyers, who primarily opt for Honda’s 110cc bestseller.
This clearly means that TVS Motor Company aims to predominantly compete with Suzuki Motorcycle India (SMIL) and Honda Motorcycle & Scooter India (HMSI) in the 125cc scooter segment once it debuts in this class with its all-new model.
TVS Motor Co vs Hero MotoCorp
TVS Motor Company, which is also the third largest scooter player in the domestic market currently, is steadily closing the gap with the second largest scooter player – Hero MotoCorp.
Industry data of FY2016 highlights that while Hero MotoCorp recorded total scooter sales of 818,777 units, TVS Motor sold 773,597 units, behind by only 45,180 units for the 12-month period.
This continues during H1 FY2017 where Hero MotoCorp has reported sales of 448,321 scooters and TVS Motor has sold 400,753 scooters. In September 2016, Hero MotoCorp outsold TVS Motor by only 5,456 scooters. (Hero: 83,990 units vs TVS: 78,534 units).
TVS Motor’s upcoming 125cc scooter is likely to fill this gap for the company. The company needs at least one or two more performing scooter brands besides the Jupiter to surpass Hero MotoCorp’s volumes in the near future. The successful Jupiter is now the second largest selling scooter brand in the domestic market.
At present, the Maestro, along with the Duet and Pleasure, deliver healthy sales for Hero MotoCorp. TVS Motor, on the other hand, has the Jupiter as the sole performer in the 90cc-125cc scooter category currently, which, according to market analysts, works more in the favour of its arch rival.
Earlier the better
While it is understood that all the companies aim to be present in all major (growing) product categories, senior industry officials have always reiterated that early to market delivers an upper hand over the rivals (who enter late) and, also in terms of the recall value.
Stepping into the 125cc scooter class, TVS Motor is also expected to steadily build its (brand) recall in the new segment before Hero MotoCorp and Yamaha follow the suit with their plans to tap the growing demand for scooters in India.
TVS Motor Company has not responded to an emailed query from Autocar Professional on its upcoming 125cc scooter model.
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