NEW YORK (TheStreet) -- So you live in suburban America and detest big cities due to their lack of clean air and hordes of people concentrated in a single area. On the weekend, a trip to Walmart (WMT - Get Report) (U.S. same-store sales have declined for five straight quarters, wow) or Target (TGT - Get Report) (the first quarter announced this week will be ugly) in a General Motors (GM - Get Report) car (hopefully this new Camaro Z28, it's a road beast) are the norm. Suffice it to say in this environment, passing a gas or electronic powered scooter on the highway would be comparable to actually investing in the next Facebook (FB - Get Report), rare.
However, jumping outside of your self-imposed bubble, scooter sales in the emerging markets of China and India are exploding. The two main reasons for this include:
- Restrictions by governments on cars as a way to combat pollution. Winner: scooter companies, such as Vespa and Honda. Losers: General Motors and Ford (F - Get Report), although the used car market in China is pretty hot right now.
- A wave of urbanization as emerging markets morph into developed countries but seek to maintain their export machines. Winner: scooters, with their tiny size and easy maneuverability.
Vespa sales increased 33% in India in the first quarter of 2014, outpacing a market that in my estimation is growing by 20%. Not too shabby!
The Stats that Explain the Emerging Market Scooter Boom
- Urbanization in Asia/Pacific is expected to grow to 55% by 2015, bringing with it increased pollution and road congestion.
- The electronic scooter market is projected to grow to 103 million units sold by 2018 from 12 million in 2012.
- Scooter sales are increasing about 20% per year.
- From 2014 to 2020, scooter sales are outlined to increase at 2x the rate as traditional motorcycles.
-- By Brian Sozzi CEO of Belus Capital Advisors, analyst to TheStreet.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.