Page last updated at 00:14 GMT, Friday, 8 January 2010

India shuns scooters as cars take over

By Shilpa Kannan
India Business Report, BBC World, Delhi motorshow

Sartaj Ali with his scooter
Sartaj Ali says his scooter is cheap and easy to maintain

Sartaj Ali is a mechanic who repairs electronic products in his little workshop in South Delhi.

After spending hours tinkering with them, he carries them to his 10-year-old scooter and ties up the TV set or the tape recorder to the back seat with a long coir rope.

Once his precious electronic products are secured he kick-starts his trusty second-hand motor scooter and off he goes from house to house. Not very different from a pizza delivery service.

Mr Ali's livelihood now depends on his old Bajaj motor scooter, bought second-hand for $10.

Cheap and easy

Once the most popular two-wheeler on Indian roads, the scooter is now an increasingly rare sight, but it still has many loyal fans.

Motorcycles at the Delhi motorshow
Most Indians prefer modern motorcycles to old fashioned scooters

Mr Ali says he cannot imagine life without his scooter.

"I carry all my products on it and deliver equipment around crowded Delhi streets," he says.

"I keep my tool kit and a spare set of clothes in the side in case there is an emergency at work. It is cheap to use and easy to maintain."

Production cut

The Bajaj scooter is an iconic Indian brand first launched in 1972.

Inspired by the Italian Vespa, these scooters captured the essence of a generation of Indians.

Entire families - husband, wife and two children - could be seen sitting on the Bajaj scooter, riding around small and big towns across the country.

They were so much in demand that there were waiting lists to buy one. Many sold at high premiums.

But as the country's economy grew rapidly, many people bypassed the scooter, instead buying fancy motorbikes or even cars.

So the parent company Bajaj has decided to do phase out scooter production.

After March 2010, the company, which is one of the largest two-wheeler manufacturers in the world, will stop producing scooters and focus on selling motorbikes.

Better vehicles

Bajaj Motors is aiming to capture a 35% share of the bike market in India where some 7 million units of motorcycles and scooters were sold last year.

Scooter production will stop but will not disappear from India's roads yet

Their scooter was once the once the best-selling scooter in the world. These days, they manufacture just 1,000 a month.

But Bajaj has four-wheeler ambitions too. It is building a $2,500 car with the help of Renault and Nissan Motors, which it hopes will rival the Tata Nano.

With growing affluence, many Indian middle class families are upgrading their scooters and aspire to buy cheap compact cars.

Catering to their demand is not just Bajaj, but every other auto major in the world from General Motors to Toyota who have their versions of the small car ready for the new Indian consumer.

Few car drivers

At this week's Delhi motorshow the focus is firmly on the small car segment with nearly 10 new compact car launches.

But does this mean the small car is now replacing the scooter as the main means of transport?

While India's roads may be packed with traffic, demand for cars is showing no signs of slowing.

Nearly 1.4 million vehicles are being added to the congested roads every year.

Even so, only a fraction of Indians are car owners. Compared with China's 27 cars per 1,000 citizens, India has only seven car owners per 1,000 citizens.

More than 75% of all vehicles sold in India are still two-wheelers. But they are predominantly motorcycles rather than scooters.

Two-wheelers to stay

Dilp Chenoy of the Society of Indian Automobile Manufacturers says cars alone can never be the only solution for mobility in India.

"The evolution in transport depends on per capita income." he says.

"If you take China as an example, you may have five million cars being produced, but you still have twenty million two-wheelers being produced.

"China's per capita income is almost three times India's. So let us say for the foreseeable future, if we look at the same models, two wheelers will stay the pre-dominant mode of transportation in the country."

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