Activa case study for Avey Tv

Achina Maya/PapaOcus

In FY 2023 Honda's Activa achieved the milestone of becoming India’s most-selling scooter by
selling more than 3 CR units as of now.

You see... Honda Activa entered the Indian market in 2001, and soon after entering the market,
it saw an amazing response from the customers and the sales started to skyrocket.

But how did Activa become the most loved scooter and the market leader in the two-wheeler
segment in just 22 Years? What are the things that Honda did right? And how did Honda
achieve this milestone?

To understand the success of Activa, first we need to understand India’s two-wheeler market.

Back then, India's market was dominated by legendary scooter Baja’s Chetak and classic bikes
such as RX100, Royal Enfield and the Hero splendor.

Now here is something very interesting. India’s market, can be divided into two phases: Pre-
liberalization and post-liberalization

Pre-liberalization India was a mixed economy, meaning the government had much control over
both public and private industries.

Which means that, now the government will decide how much of the production and
manufacturing will be done in each year.

And to establish a company or to set up a manufacturing unit you had to get a license from the
government and getting these licenses was not easy, you needed a lot of permissions and had
to go through difficult government processes. This time is also referred as the license raj.

Baja’s Chetak was launched in 1972 and soon after launching it became a massive hit. People
loved it so much that they used to treat chetak like a family member, and every family wanted to
have a chetak. Its Slogan “Hamara Baja” just reflected that.

People loved chetak so much because of its durability and reliability. Chetak was strong in build
and barely needed any maintenance.
But The waiting period for chetak per-liberalization was minimum of 1 year and it could go up to
a whooping of 10 years if you. Only production of 10,000 units of chetak were allowed during the
license raj from (1951 to 1999).

People had to go to the factory to place the order and placing the order was also not that easy,
there was a long procedure to be followed.

The craze for Bajaj was so much that it became a part of the dowry. In this “unfortunate” practice
almost every groom’s family wanted the chetak as a gift.

People used to book the scooter years in advance so that at the time of their daughter's
marriage it should it available, there are even cases reported of the wedding getting delayed
because the scooter was not delivered on time.

If Bajaj’s chetak was such a hit, then why did fail despite of after ruling the Indian market for 4
decades and losing its 60% market share which made it the 2nd most sold scooter in the world.

Yes, it is true that chetak was very reliable and durable, but it was not that comfortable. Post lib
when the Japanese's motorcycle entered the Indian market, people started choosing them
because of comfort and milage.

Bikes such as Yamaha's Rx 100, Hero Splendor, and royal Enfield, started to become the choice
of new India.

These bikes offered better comfort, milage and long rides. Specially people in rural areas stated
purchasing them.

Though these bikes were doing well there was always a gap in the market, as the female
population of India did not have many options to ride on.

Kinetic Honda was a popular moped (Mopeds are scoters with 50cc engines only)amongst the
female population because it had an auto ignition switch and was gearless, the sales of this
mopeds was increasing, and the price was also very high, people were buying it despite of high
price, but the final product was not so good, With time the price increased but the moped did not
become better.

At one point Honda wanted to buy out the entire company but Firodia's who owned kinetic were
not ready to sell.

This was the market situation back then and here’s where Honda saw an opportunity to fill the
gap in the market and came up with a joint venture with Hero.
Unlike kinetic Honda, Activa with its amazing Japanese's auto gear engine and particularly good
suspension offered durability and comfortable seats with a long footrest to the customers.

With time Activa was just becoming better, 2nd gen Activa with its modern design had combi-
brake system which was the first scooter to have it in India, making rides safer. Activa 3g
became even more popular because of its improved engine offering good milage and the first
scooter to have tubeless Tyres.

Honda knew if it had to grow and expand in India with a good product, it had to make the entire
operation friction less starting from sales to distribution to service and the availability of spare
parts.

There are few major reasons why Honda did so well in India.

1st is their 4s strategy.

Sales
Service
Spare parts
Safety.

Sales: - Honda very much focused on building a wide distribution network making sure that
people have access to the showrooms and do not have to travel long distances to place an
order. Honda now has more than 1000 showrooms in more than 200 cities and has more than
6000 touchpoints where customers contact them.

Service: - Honda also made sure that all the showrooms have a service facility so that the
customer should not worry about the service post purchase.

Spare parts: - Making sure that the Sapre parts are available in the aftermarket and in the
showroom at an affordable price.

And last was Safety: - it is a part of their social campaign creating awareness of safe rides.

2nd Activa was marketed as a unisex scooter making it popular among all the customers.

People believed in Activa so much that, till today, it has a very good resell value in the second
had market.

With almost every mechanic doing its service at an affordable price and its spare parts easily
available it made the after service and resell value to increase.
If Honda Activa is so successful in India and if it has an amazing distribution, why is that Honda
has not yet entered the EV market despite being the most selling scooter in India.

The wait is finally over Honda is about to launch its 1st EV scooter Activa EV in 2024 this year
and ready to compete with a few popular brands such as ola and Ather.

It would be interesting to see if Activa electric can get the same amount of success as its IP
version. As of now the estimated price of the Activa electric is about 1lac to 1.2 lac.

Honda has also built a new manufacturing unit in Narsapur Karnataka, with a production output
of 1million vehicle per year. To give you a reference, Ather now has a yearly output of 4 lac
vehicle as of now.

Honda has already started to lay the groundwork, it had partnered with HPCL to have Charing
facility for its vehicle in all HPCL petrol pumps, whereas hero had partnered with BPCL. And
they are also building battery swapping facilities at the petrol pumps.
I am very excited to see how the EV market will change and evolve in the future. We also did a
complete bread down of the EV market you can click this this button to check that out.

Opening skit

Men and boys riding bikes very nicely and girls not having any option to ride. After activa both
men and women like the scooter.

Achina mam’s sample cloned audio.

https://drive.google.com/file/d/1umZ0x-Hm-OZ6X28gANt2Ze_cgXWNo2YF/view?usp=sharing

Ending: -Rap song of activa... audio file attached created with Suno.ai
https://cdn1.suno.ai/c692f940-d8bf-4785-b68b-1634052d581b.mp4
https://cdn1.suno.ai/f8c47b5a-db5b-4e1a-8be5-952ca872c8b6.mp3

Thank you.