Scooter sales lose steam as costlier USD bites

The sales of scooters, which are popular among city-dwellers and women bikers, fell 20 percent year-on-year in the first 10 months of 2023, owing to the dearer US dollar and higher prices, industry people say.

On average, 379 units of scooters were sold each month between January and October, down from 622 units in 2022, industry data showed. In 2022, some 7,467 units were sold last year, a decrease of 20 percent from 9,221 a year ago.

The sales drop came as about 30 percent decline in the value of the local currency against the US dollar in the past 18 months has driven up the price of scooters, parts and accessories in Bangladesh. Besides, persistently higher inflation has eroded the purchasing power of consumers.

"Scooter is getting increasingly popular among city-dwellers for short distance ride," said Subrata Ranjan Das, executive director of ACI Motors Limited, the sole distributor of Yamaha motorcycles in Bangladesh.

Global and local brands such as Suzuki, Yamaha, Honda, TVS, Hero Honda, Runner and Walton are retailing scooters, including electric ones, in the local market.

Runner is the sole distributor of Vespa and has its own scooter brand as well.

Hafizur Rahman, chairman of Runner Group, said in terms of market demand, scooters are better-placed than motorcycles.

"Buyers' preference is changing as well and scooters offer a better ride experience."

The scooter market is expanding on the back of rising per capita income and a youth population.

AKM Tauhidur Rahman, chief operating officer at Suzuki Bangladesh, said some people and women bikers prefer scooters.

Abdul Matlub Ahmad, chairman of Nitol Niloy Group, said scooters are getting popular among men and women.

"In the past, only male buyers used to purchase scooters. Now women are buying scooters in urban and rural areas as the mindset is changing."

HMCL Niloy Bangladesh Ltd, a joint venture between Niloy Motors Ltd and Hero MotoCorp Ltd of India, has been retailing scooters in Bangladesh for a long time.

Chennai-based multinational motorcycle manufacturer TVS Motor Company is the market leader in the scooter market in Bangladesh, accounting for around 40 percent of the share, followed by Suzuki, which has a 30 percent stake, according to industry people.

Other brands meet the rest of the demand. So, motorcycle retailers are launching new and up-to-date models to expand their market share.

Biplob Kumar Roy, chief executive officer of TVS Auto Bangladesh, says the price of a scooter is always higher than a motorcycle for technological reasons.

"We have a plan to bring in more models as per the requirements of customers."

The Indian company currently retails two models of scooters.

Despite its growing use, the scooter market is still in its nascent stage in Bangladesh: scooters constitute less than 2 percent of the total motorcycle market in Bangladesh.

Nitol Niloy Group's Ahmad, however, thinks the market share of scooters will increase in the coming days.