India’s leading electric scooter maker Ola Electric reported its lowest monthly sales this year in September, government data shows, as the SoftBank-backed firm loses market share to smaller rivals and struggles to service its products.
Ola Electric, which had gone public nearly two months ago, sold 23,965 vehicles during the month of September, marking the second consecutive month with a sequential decline in sales.
This month-to-month decline in sales has dragged its market share down for five successive months to 27 percent in September from over 50 percent in April, the data said.
That time, Ola’s biggest competitors TVS Motor and Bajaj Auto have shrunk the gap, reporting market share gains for five and three successive months, respectively.
Ola Electric did not respond to a question about the lost market share and its servicing network.
Ola, whose prices had undercut the market often, has now been selling at a slow pace. It has still not earned a profit.
Analysts believe that the lead in the market that Ola had is being eroded by its very competitors – newer models that are as expensive as an Ola scooter and the company’s troubled service network which has scooters stacked up.
For instance, ramp-up in dealership networks has been a vital factor in Ola facing challenges from Bajaj and TVS, according to Elara Capital’s Jay Kale.
Bajaj has over the last year more than doubled its dealerships from nearly 100 to over 500 for its Chetak e-scooters as of June. At Ola, dealership count has moved merely from 750 to 800.
Last month, a 26-year-old man was arrested for allegedly setting fire to an Ola showroom in the southern Karnataka state over unsatisfactory servicing of a recently purchased e-scooter.
HSBC analysts said in a note last month that Ola’s service would be one of the “key drivers” for maintaining its market share.
