MAY 25, 2003
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Q&A With Jack Dangermond
Meet the President of the California-based Environmental Systems Research Institute, a $480-million Geographic Information System (GIS) company. The man was in Delhi recently to sign an MoU with the Department of Science and Technology (DST) for the 'Mapping Your Neighbourhood' project. So what's this all about?


Village Women
Could Hindustan Lever be on to something big? Its Shakti project is a micro-credit programme that intends to get rural women organised into self-help groups, and that too, in such a way that raises their purchase budgets manifold. This just might be the way to crack the rural scene. A look at the potential.

More Net Specials
Business Today,  May 11, 2003
 
 
Scooter Mania!
In a third millennial reversal of roles, Indians may soon ride scooters for style, motorcycles for substance.

The wasp's contribution to the Indian software industry is chronicled in black and white in the y2k annual report of Infosys Technologies. Co-founder and Deputy Managing Director N.S. Raghavan, then 56, had retired in the course of the year and in a message in the report, Chairman N.R. Narayana Murthy wrote of him: "He was the first-ever chauffeur of an Infosys vehicle-a rented Vespa scooter-ferrying me, an eternal pillion rider, across the streets of Bangalore during 1983."

The wasp, of course, is the Vespa (it quite simply means that), a scooter first manufactured by Enrico Piaggio in 1946 at his family's bombed-out aircraft factory in Pontedara and driven to cult status as much by the product and its benefits (cost and convenience) as the cultural cues surrounding it-two of celluloid's most famous couples, Audrey Hepburn and Gregory Peck in Roman Holiday in 1953 and Marcello Mastroianni and Anita Ekberg in La Dolce Vita in 1960, moved around on wasps.

A world and several years away, Shivaji Rao Gaekwad, a bus conductor who was to achieve phenomenal success as a movie star under the name Rajnikanth, listed a one-room apartment, all the cigarettes money could buy, and a Vespa as his measure of success. That was in the 1970s, much before he became the reigning deity of Kollywood, Chennai's motion pic industry, but the desire to own a Vespa was well in keeping with the great middle class revolution of the late 1960s. Everyone wore flared trousers, rode scooters, sported broad ties with loud patterns, and nurtured mutton-chop-reminiscent sideburns. Much before Murthy and Raghavan's famous ride, and well before Rajnikanth's statement of purpose, the scooter had stopped being cool.

Scooters rule in Pune: the city is packed with colleges, the weather is outdoorsy, and the traffic manageable

It was that, cool, during Rahul Bajaj's days as an economics undergrad at New Delhi's St. Stephens College in the late 1950s. His Vespa was one of the two student-owned two wheelers on campus and it was considered the height of chic. By the 1960s though, the scooter had come to embody the aspirations of middle-class India. ''The scooter was, and to an extent remains, India's family vehicle. It means all that a car means in developed countries,'' says Rahul Bajaj. It was inexpensive. It was comfortable. It could accommodate Mr & Mrs Bharat and their two children. And it was, as the couple mentioned in the previous sentence would have no doubt affirmed, "decent". There was a gap between the pillion rider and the rider; most scooters actually sported rider seats with a small handle behind that the p r could hold on to; and man and woman could ride into the sunset on a scooter with a few morally-safe inches separating them.

For close to two decades, the waiting period for a Bajaj scooter was 10 years. A person would pay a deposit, wait endlessly with a number, often sell it at a premium to people who wished to jump the line, and then, one day, amidst much celebration and jubilation, wheel a scooter out of the showroom and back home. "The scooter gave wings to the Indian middle class," says Sulajja Firodia Motwani, the Joint Managing Director of Pune-based Kinetic Engineering.

India's economic glasnost of the early 1990s changed all that. A born-again consumer reflected on how stodgy the scooter looked. And how few kilometres it gave to the litre. He (for it was predominantly that, then; any shes on scooters were purely adventitious customers) also felt the stirrings of vanity. Motorcycle makers stepped in to fill an emerging gap in the market. By 1997, motorcycles had become the market. "The scooter was unspectacular, anonymous, and addressed very middle-class concerns," explains Santosh Desai, the President of McCann Erickson, who used to ride a TVS moped (a portmanteau of motorcycle and pedal) in college. "The movement to motorcycles took place in line with an overall change in taste, desire, and ability to buy things." And so things stood till the early 2000s.

THE ITALIAN CONNECTION
...or what is it about scooters that makes them popular in India and Italy? Or is it actually about India and Italy?
Roman Holiday: These days Vespa would have to pay for this kind of in-firm visibility
Both are recent democracies (roughly the same age) that have seen several changes in government. The indigenous peoples of both are passionate, display a healthy disregard of the law, and are deeply religious. The family is central to both cultures. And oh yes, the scooter is an ubiquitous sight and traffic is chaotic in both countries. Is there a causal relationship between the first three sentences and the fourth? This writer isn't sure. Still, there must be something in the fact that when Italian company Innochenti decided to sell the Lambretta brand, it was public sector company Scooters India that acquired it. Somewhere along the way, though, Italy took a different turn in the road and ended up a first world country, a member of the European Union and G8, no less. So, while you will still see scooters on Italian roads, they are unlikely to be like any you have seen in India.

From slim, athletic models that look suspiciously like drag bikes to more substantial ones that bring cruisers to mind, scooters are the preferred way of getting around for the city's young. Is India embarking on a similar transformation? Likely, not on this scale, but expect to see some cool scooters very soon.

There's A Market Out There...

Kojiro Iguchi's earnestness prevents one from concluding that the man is making a virtue of a necessity. The long-maned Japanese is the Head of Sales and Marketing of Honda Motorcycles & Scooters India Ltd (HMSI), a wholly-owned subsidiary of Japan's Honda Motor Company. Courtesy an existing joint venture with the Munjals, HMSI cannot make motorcycles in India till 2004. Iguchi believes the Indian scooter market declined not because of changing customer characteristics or new motorcycle launches but because companies weren't launching the right kind of scooters. "Even if buyers had the desire to buy scooters, they couldn't because the right product wasn't there in the market."

HMSI's performance suggests that Iguchi could be right. In 2001, the company launched Activa, a gearless scooter with new-age looks that runs 50 kilometres on a litre of petrol. Last year, it followed up with another scooter, Dio. Together, the two sold 155,000 units in 2002-03. And they proved that there was still a market for scooters out there. "Honda's Activa has redefined the market," admits Venu Srinivasan the CEO of TVS Motor. Four years ago, Srinivasan had a vision about a style-heavy four-stroke scooter and launched the Spectra-and what a launch it was with illusionist Franz Harary producing the scooter out of thin air, well, almost. The product bombed and TVS exited the scooter market. Now, emboldened by the success of Activa, TVS is getting ready to crank out scooters again. "We will launch a new scooter model every year for the next three," declares Srinivasan.

The back-to-basics return-to-scooters refrain is being heard across the country. In 1998, Rajiv Bajaj, the President of Bajaj Auto, vowed to bring the smiles back at the company-it was the biggest casualty of the shift in the market-by converting it into a motorcycle maker. By 2002, he had done that, although it still made some half-a-dozen models of scooters. Now, he wants to look at scooters again. "It is time to develop scooters that will redefine the category," says R.L. Ravichandran, Vice President (Marketing and Business Development), Bajaj Auto. "We want to put the romance back in scooters."

Those words are backed by frenetic activity at the company's Chakan factory where a team of 40 is designing an all-new scooter platform that can spawn several models, some with four-stroke engines, others with automatic transmission. Their primary concern is style. The new steeds will be displayed at India's biennial AutoExpo held in New Delhi. And if they click, it will be a full circle for the company.

WHO'S BUYING
The primary customers of scooters.
The lower middle class: Across the country, there are families of four, sometimes five, that still travel on scooters. These are typically lower middle class households where the head of the family is a junior employee, mostly in the government, or a small time trader.

The young: The college going set won't be caught dead on old-style scooters, but new-age models such as Activa, and a few offerings from Kinetic and Bajaj meet with their approval. They are easy to ride, are meant for either sex, and seem (that's the operative word) a lot safer than motorcycles

Women: Most women don't ride motorcycles. But especially in cities where it is safe for women to venture out on two-wheels (rule out Delhi, but include Pune, Hyderabad, Chennai, Chandigarh, Bangalore and a clutch of others), the scooter is the preferred mode of transport.

...But Motorcycles Will Continue To Rule

Pune is, arguably, India's scooter capital. Yesterday's sultan of scooters Bajaj and category faithful Kinetic (it never lost its focus on scooters despite its late 1990s and early 2000s foray into motorcycles) are located here. As are some 50 graduate and post-graduate colleges. The weather is outdoorsy, the traffic manageable and not yet big city-ish. That makes it an ideal market for scooters and motorcycles. New-age scooters have re-entered the lexicon of cool with the college crowd. They sport radically different looks, require no great riding expertise, and can be ridden with equal felicity (and no fear of being caught on the wrong steed) by both men and women. HMSI, for instance, claims, women and the college going crowd love Activa and Dio.

Still, it is unlikely that scooters will replace motorcycles as the dominant force in the two-wheeler market. They have staged a comeback of sorts-according to figures published by the Society of Indian Automobile Manufacturers, scooters in the range of 75cc and 125 cc accounted for 11.26 per cent of the 48,73,989 units a year market in 2002-03, as compared to 9.4 per cent of a 42,03,725 units a year market a year ago-but comeback of sorts it will remain.

What is likely, however, is that scooters manage to regain some of their lost sheen. Scooter faithfuls who bought the product largely on the strength of its cost-on an average, a scooter costs around 30 per cent lower than a motorcycle-and utility will continue to do so. "The scooter remains a family vehicle," says Hormazd Sorabjee, Editor of Autocar India. "It offers the big advantage that a kid can sit or stand in front." What is also likely is that newer contemporary scooters manage to capture a sizeable portion of the youth market, or the women-on-two-wheels market, much like Activa has done. And maybe, just maybe, companies will finally launch the kind of scooters that appeal even to die-hard motorcycle fans. HMSI's 150 CC Entero could be the ticket. Or we may have to wait for a new Bajaj, Kinetic, or TVS scooter to do that. Expect a slew of clones when the first one succeeds.

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