Honda Motorcycle and Scooter India (HMSI) is going the Bajaj way. The company is riding out of the geared scooter segment and will phase out the Eterno, its only product in the segment. The company will also roll out its new 110 cc Activa and plans to sell 5.5 lakh units of the new Activa this fiscal.
Here is a verbatim transcript of Swati Khandelwal’s comments on CNBC-TV18. Also watch the accompanying video.
Bajaj had phased out its flagship model Chetak way back in 2006 because they realised that the market, going forward, will not be for the geared scooters and it will be actually automatic scooters and high-end bikes. That is what is exactly happening. One has seen LML going almost bust in 2006 where their flagship model LML Vespa, which gave a good and tough competition to Bajaj Chetak was phased out. Both, Honda and Bajaj pulled out of their products and there was actually a very small market, which was occupied by Honda Motorcycles and Scooters with its product Eterno.
Eterno has been doing about 40,000 units per year sales. The company realises that there are two main reasons for the company to phase this product out. They say that the sales have gone down dramatically and they feel that there has been very little interest from the consumer’s end to buy this scooter. This is because they feel that the inconvenience with the geared scooter gives the customer a choice to move on to the automatic scooter where there is no gear.
Secondly, one had an advantage of fuel efficiency in geared scooters, but now, there has been a breakthrough in technology and you get almost similar sort of fuel efficiency in the automatic scooters.
Therefore, they are the two reasons why the company says it will now not produce Eterno and hence almost mark the end of the era of the geared scooter.
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