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Bike Makers Gear up to Ride Cross-Country
Japanese challengers Honda & Suzuki to vie with Indian champions
Hero & Bajaj in entry level
RAJIV SINGH NEW DELHI
As Honda and Suzuki shed their premium tags,strap on helmets and
drive into the hinterland,the country is gearing up for cutthroat
competition between the Japanese challengers and Indian
champions Hero and Bajaj in the entry-level bike segment.The entry
level,or commuter segment,which includes motorcycles powered by
75-125 cc engines,accounts for 70% of the worlds second-largest
motorcycle market.Its a consuming segment,so everybody wants to
have a share of the ever-growing pie, says VG Ramakrishnan,senior
director,automotive practice,at Frost & Sullivan.Low ownership of
two wheelers,rising incomes in rural and semi-urban areas and
increasing number of youngsters in the country are among factors
that will help this segment grow and accelerate.This bread-
and-butter segment will continue to gallop and give volumes to the
bike makers, Ramakrishnan says.Bike makers are most aggressive
in the 100-125 cc segment (bikes priced between.38,000
and.50,000).Within a span of less than a month,this segment
dominated by the likes of Heros Passion and Splendor,BajajsDiscover and TVS Star Sports has seen a flurry of launches such as
Suzuki Hayate,Bajaj Discover 125 ST and Honda Dream Yuga.And
theres more to come as bike makers gear up to flood this sector
with aggressively priced new products and variants.Reason The
commuter segment has been the fastest-growing segment in Indias
10-million-units motorcycles market,steadily growing its share from
48% in 2005-06 to 65% in 2010-11 to 70% now.Analysts say its set
to explode at an even faster pace.
UNDER-PENETRATED MARKET
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While India trails only China in terms of the number of twowheelers
sold in a year,penetration level in the country is still much lower than
other emerging markets such as Brazil,Indonesia,Thailand and
Taiwan.Almost 80% of households do not own a two-wheeler,and
40% of the population has no mode of transport,a recent report by
PINC Research says.Also,the demand for twowheelers in now
mainly driven by rural India.While twowheeler household penetration
in rural India more than doubled (between 2001 and 2011) to
14.3%,the growth in urban India was more sedate growing from
24.7% to 35.2%, says the report published in March.While anincrease in crop prices over the last few years has left larger
disposable incomes with rural people,non-agrarian sources of
income is also on the rise,says another report by credit rating and
market research agency ICRA.Around 60% of the rural economy
depends on non-agricultural sources of income such as remittances
from cities,trading,and employment in the manufacturing sector,says
the report.With rural incomes rising and roads connecting more
villages in the country,rural India will continue to drive the
two-wheeler market.Thats why foreign two-wheeler makers are now
headed for rural India.
FROM CLASS TO MASS
India is a classical mass market.In order to make it big in the
country,foreign brands will have to shed their premium tag and
plunge into mass market,say analysts.The strategy to straddle all
segmentsfrom class to masshas paid rich dividends to multinationals
such as Samsung (consumer durables as well as mobiles) and
Nokia.Prathap Suthan,chief creative officer of Bang in the Middle,an
independent advertising agency,says foreign brands will have to
sacrifice western idiom for Indian signatures to make it big in the
country.In a market where aesthetic quotient of the buyer is still
rudimentary at best,the brands will have to lower their appeal and
adapt to Indian sensibilities, he says.This is what Honda has done
with Dream Yuga,its newly launched first 110cc bike for mass
marketa potent combination of English Dream with Hindi Yuga.With
450-odd million making up the market and with monies to spend,it
would be unwise not switching to Hinglish, says Suthan.The
Japanese auto majors choice of Bollywood star Akshay Kumar as
its first brand ambassador in India is also done with an aim of
capitalising on Akshays mass appeal,especially in smaller cities and
towns.We have roped in Akshay Kumar as brand ambassador for
mass acceptance and emotional connect in the market, a Honda
India spokesperson says.Another Japanese major,Suzuki,donned a
desi avatar last month by roping in Dabangg Salman Khan for its
first motorcycle in the mass segmentHayate,a 112 cc
bike.Meanwhile,Japanese bike majors romance with rural India may
give sleepless nights to Indian auto biggies,especially HeroMotoCorp,which has 55% share of the market.
HERO VERSUS HONDA
Hero will be hit most by Hondas mass play, says Frost and Sullivans
Ramakrishnan.With the entry of Dream Yuga,he says its a direct
fight between Hero and Honda as Bajaj is not a real competitor in
the entry-level segment.Honda,the world's largest motorcycle
manufacturer,has been steadily raising production and sales across
the two-wheeler segment since it ended a 26-year joint venture with
Hero Moto-Corp in March last year.This April,Honda Motorcycle and
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Scooter Indias sales grew nearly 50% year-over-year,and it
overtook TVS Motor to become the third largest two-wheeler maker
in India.While Honda is racing to catch up with Hero,Indias largest
bike maker is betting big on its flagship brands Splendor and
Passion as well as two new models to ward off any threat in the
commuter segment.The company has more than 70% share in the
segment up to 125 cc,Hero MotoCorp Senior VP (Marketing &
Sales) Anil Dua says.Splendor and Passion each clocked million-plus
unit sales in 2011-12.With the planned launch of two new bikesthe
125cc Ignitor and the 110cc Passion Xprolater in the year,we areconfident of further strengthening our leadership position, Dua
says.Bajaj Auto,the second-largest player,too is strengthening its
portfolio in the commuter segment.We continue to be the second
largest two-wheeler manufacturer in India in April,and have a
significant lead over the third-largest manufacturer, says K
Srinivas,president -motorcycle business,Bajaj Auto.In March,Honda
had pipped Bajaj by a few hundred units to become the second-
largest twowheeler maker for the month,thanks to its leadership
position in the fast-growing scooter market.More than 60% of its
sales come from scooters.We will continue with our focused
approach as a motorcycle specialist, Bajajs Srinivas says.
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