After months of diplomatic hankering and political pressure from New Delhi, Pakistan may finally add more items to the positive list for trade with India. Top government sources said Islamabad is considering allowing imports of two-wheelers and gold from India, though a final decision will be taken by the Pakistani Cabinet.
While a positive list limits commerce by barring trade in all items except those named in the list, a negative list does the opposite — enhances commerce by allowing trade in every item except the few named in the list.
Sources told FE that last week’s Indian delegation to Pakistan, led by commerce minister Anand Sharma, pushed for expanding the positive list of 1,963 items by including items like gold, auto components and two-wheelers. India is simultaneously planning to amend its Foreign Exchange Management Act (Fema) to let Pakistani firms invest in India, which is currently prohibited due to security reasons.
Honda to launch new sports bike at Rs 1.15 lakh
Honda Motorcycle and Scooter India (HMSI) is readying for the launch of a new sports bike next month. The forthcoming product, the country's third largest two-wheeler producer said, would take on Bajaj Auto's freshly-introduced product under the KTM brand.
The CBR 150R of the Japanese subsidiary to be launch in March is priced at about Rs 115,000, pitting it directly against the KTM Duke 200 (Rs 117,000). Only last month had Bajaj Auto, India's second largest two-wheeler maker, launched the Austrian-brand street bike.
The CBR 150R, powered by engine of around 150cc, is a downsized clone of the popular CBR 250R that HMSI sells at little over Rs 145,000. The new bike will also compete against Yamaha's R15 sports bike, which recently received a face-lift and is priced at Rs 107,000.
Though Bajaj's KTM bike offers better power with a slightly bigger engine in straight comparison, HMSI chose to price its CBR 150R at a premium than Yamaha and fractionally lower than KTM Duke.
HMSI had showcased the CBR 150R at the Auto Expo early last month without disclosing price details. The bike, which will be fully built in India, had received strong response from the visitors, according to company officials.
The company hopes to sell more than 3,500 units of the CBR 150R every month after its launch. Currently, Yamaha's R15 version 2.0 clocks sales of around 3,000 units per month.
This will be the third new offering by HMSI this year after it launched a face-lifted Dio with a new engine this month.
The Delhi-based company, which recently overtook Chennai-based TVS Motors to claim the third spot, has lined up seven new products for launch this year.
The company has lined up a face-lifted CBR 250R model for launch by this month-end. The new 2012 edition, also show-cased at the Auto Expo, will be dearer by Rs 1,500 offering a new colour combination.
Naresh Rattan, vice-president, sales and marketing, HMSI said the company was due to launch the CBR 250R shortly in the market. "The new bike has gone under production by the middle of this month," he added.
The CBR 250R has seen some substantial slide in sales in the recent months. The company saw sales of under 140 units of the bike in January as against its usual tally of around 2,500-3,000 units every month.
"There is no dearth of demand for premium priced bikes in India despite a broader slowdown in demand for the commuter bikes witnessed by a few players," Rattan noted. "The market is growing rapidly even is such times."
HMSI is phasing out the current generation of the bike from the distribution channels before trying to launch a face-lifted version.
Further, the company has been facing problems regarding components supplies from Thailand.
"There have been issues relating to components shortage due to the recent floods in Thailand which has impacted local production," revealed Rattan. "This matter is being sorted out before we launch the new version."
Besides the commuter segment bikes, the company is lining up latest versions of imported models, such as the CB1000R and the CBR Fireblade for launch.
The CBR 150R of the Japanese subsidiary to be launch in March is priced at about Rs 115,000, pitting it directly against the KTM Duke 200 (Rs 117,000). Only last month had Bajaj Auto, India's second largest two-wheeler maker, launched the Austrian-brand street bike.
The CBR 150R, powered by engine of around 150cc, is a downsized clone of the popular CBR 250R that HMSI sells at little over Rs 145,000. The new bike will also compete against Yamaha's R15 sports bike, which recently received a face-lift and is priced at Rs 107,000.
Though Bajaj's KTM bike offers better power with a slightly bigger engine in straight comparison, HMSI chose to price its CBR 150R at a premium than Yamaha and fractionally lower than KTM Duke.
HMSI had showcased the CBR 150R at the Auto Expo early last month without disclosing price details. The bike, which will be fully built in India, had received strong response from the visitors, according to company officials.
The company hopes to sell more than 3,500 units of the CBR 150R every month after its launch. Currently, Yamaha's R15 version 2.0 clocks sales of around 3,000 units per month.
This will be the third new offering by HMSI this year after it launched a face-lifted Dio with a new engine this month.
The Delhi-based company, which recently overtook Chennai-based TVS Motors to claim the third spot, has lined up seven new products for launch this year.
The company has lined up a face-lifted CBR 250R model for launch by this month-end. The new 2012 edition, also show-cased at the Auto Expo, will be dearer by Rs 1,500 offering a new colour combination.
Naresh Rattan, vice-president, sales and marketing, HMSI said the company was due to launch the CBR 250R shortly in the market. "The new bike has gone under production by the middle of this month," he added.
The CBR 250R has seen some substantial slide in sales in the recent months. The company saw sales of under 140 units of the bike in January as against its usual tally of around 2,500-3,000 units every month.
"There is no dearth of demand for premium priced bikes in India despite a broader slowdown in demand for the commuter bikes witnessed by a few players," Rattan noted. "The market is growing rapidly even is such times."
HMSI is phasing out the current generation of the bike from the distribution channels before trying to launch a face-lifted version.
Further, the company has been facing problems regarding components supplies from Thailand.
"There have been issues relating to components shortage due to the recent floods in Thailand which has impacted local production," revealed Rattan. "This matter is being sorted out before we launch the new version."
Besides the commuter segment bikes, the company is lining up latest versions of imported models, such as the CB1000R and the CBR Fireblade for launch.
As scooters fly, a seven - way war looms
Scooters are blazing a long, wide trail.
The segment, written off by many not so long ago, is getting crowded with each passing year as demand rules strong.
As of January this fiscal, the segment has logged 23% growth, followed by motorcycles with 14%, according to data provided by the Society of Indian Automobile Manufacturers. Overall two-wheeler industry growth was at 15.06%. What's more, at 2,067,504 units, scooters accounted for nearly 18% of two-wheeler industry volumes, too.
Honda Motorcycles and Scooters (HMSI) dominates the segment — once the stranglehold of Bajaj — with a market share of 46%. TVS (20%), Hero Motocorp (16%), Suzuki (10%) and Mahindra 2 wheelers (5%) are the other major players, while Yamaha and Piaggio have announced plans to drive in next fiscal.
Driving the demand for scooters are female and young customers. And gearless scooters, flying at around 20% a year, are the top pick.
"The main driving factors are convenience and the fact that every family member can use the product easily. With improved fuel efficiency and better styling, scooters satisfy the need of the entire family," said Naresh Rattan, vice-president, sales and marketing, HMSI.
Predictably, geared scooters are still losing out. In the 90s, the likes of Kinetic Motor, Majestic Auto and LML had fallen by the wayside due to their inability to offer products in line with demand.
The big turning point came with the introduction of the Honda Activa. Its runaway success was enough for existing players like Hero Honda (now Hero Motocorp) and Suzuki to realise the magnitude of demand for scooters that is waiting to be tapped.
Next thing one knew, companies were lining up products keeping in mind customer profiles. While TVS Scooty courted young buyers, the likes of Honda Activa were a big draw with female customers.
In fact, females constitute 25% of buyers for scooters in India, and growing.
"The scooter segment will continue to attract attention with increasing demand coming from college students and working women. The market is expected to become more competitive with new players entering and multiple product launches at attractive price points," said Abdul Majeed, auto practice leader, PricewaterhouseCoopers.
Surjit Singh Arora, analyst with Prabhudas Lilladher, concurred. "The motorcycle segment is expected to see a slowdown next year or witness a flattish growth. However, the scooter segment looks positive with new launches lined up," he said.
Icra analysts Subrata Ray and Jitin Makkar feel there is enough room for everybody to grow. "Icra expects the scooter segment to gradually increase its share in the domestic 2W market from 17.6% in 2010-11 to 21% by 2014-15. With this, the domestic scooters market is estimated to nearly double in size by 2014-15," the duo noted in a report.
The segment, written off by many not so long ago, is getting crowded with each passing year as demand rules strong.
As of January this fiscal, the segment has logged 23% growth, followed by motorcycles with 14%, according to data provided by the Society of Indian Automobile Manufacturers. Overall two-wheeler industry growth was at 15.06%. What's more, at 2,067,504 units, scooters accounted for nearly 18% of two-wheeler industry volumes, too.
Honda Motorcycles and Scooters (HMSI) dominates the segment — once the stranglehold of Bajaj — with a market share of 46%. TVS (20%), Hero Motocorp (16%), Suzuki (10%) and Mahindra 2 wheelers (5%) are the other major players, while Yamaha and Piaggio have announced plans to drive in next fiscal.
Driving the demand for scooters are female and young customers. And gearless scooters, flying at around 20% a year, are the top pick.
"The main driving factors are convenience and the fact that every family member can use the product easily. With improved fuel efficiency and better styling, scooters satisfy the need of the entire family," said Naresh Rattan, vice-president, sales and marketing, HMSI.
Predictably, geared scooters are still losing out. In the 90s, the likes of Kinetic Motor, Majestic Auto and LML had fallen by the wayside due to their inability to offer products in line with demand.
The big turning point came with the introduction of the Honda Activa. Its runaway success was enough for existing players like Hero Honda (now Hero Motocorp) and Suzuki to realise the magnitude of demand for scooters that is waiting to be tapped.
Next thing one knew, companies were lining up products keeping in mind customer profiles. While TVS Scooty courted young buyers, the likes of Honda Activa were a big draw with female customers.
In fact, females constitute 25% of buyers for scooters in India, and growing.
"The scooter segment will continue to attract attention with increasing demand coming from college students and working women. The market is expected to become more competitive with new players entering and multiple product launches at attractive price points," said Abdul Majeed, auto practice leader, PricewaterhouseCoopers.
Surjit Singh Arora, analyst with Prabhudas Lilladher, concurred. "The motorcycle segment is expected to see a slowdown next year or witness a flattish growth. However, the scooter segment looks positive with new launches lined up," he said.
Icra analysts Subrata Ray and Jitin Makkar feel there is enough room for everybody to grow. "Icra expects the scooter segment to gradually increase its share in the domestic 2W market from 17.6% in 2010-11 to 21% by 2014-15. With this, the domestic scooters market is estimated to nearly double in size by 2014-15," the duo noted in a report.
Atul Auto gets a foothold in the three - wheeler market
Atul Auto Ltd, the relatively little-known Gujarat-based maker of three-wheeled passenger and goods carriers, has seen a small gain in marketshare in a segment that has bigger and more established rivals such as Bajaj Auto Ltd, Piaggio Vehicles Pvt. Ltd and Mahindra and Mahindra Ltd.
The advance comes amid overall three-wheeler sales staying almost unchanged in the first 10 months of fiscal 2011-12 as high interest rates have dissuaded buyers from purchasing new vehicles. Sales have contracted 0.44% to 428,733 units from the year earlier.
Atul Auto’s marketshare went up to 5.06% from 3.55% as sales rose to 21,673 units from 15,628 units, according to data from the Society of Indian Automobile Manufacturers, or Siam.
The Rajkot-based auto maker, credited with having pioneered motorized rural transport in Gujarat, has thus far been confined to its home state and neighbouring Rajasthan. It’s now looking at establishing a national presence.
Sales have held up because banks and other auto loan providers haven’t been dissuaded by the brand name not being a widely known one, thus reposing confidence in the Atul Auto vehicles locally and overseas, especially the Gem, said J.J. Chandra, chairman and managing director.
Also See | Inching up (PDF)
“We have been working on a major market expansion plan since last year,” he said. The company’s key focus during this exercise will be the domestic market, he added. It currently exports vehicles to Kenya and Bangladesh.
Atul Auto has three models— Shakti, Smart and Gem, the last of which is a high-volume product. The recently launched Smart, an upgraded version of Shakti, will be the first Atul Auto product to be introduced in states such as Tamil Nadu and Madhya Pradesh. The company is in the process of doubling its capacity to 48,000 units per year with an investment of Rs. 8-10 crore. It’s also working on two new models—a sub-1-tonne four-wheeler that will be pitted against Tata Motors Ltd’s best-selling Ace and a small three-wheeler, said Paul Zachariah, vice-president, marketing.
Both the models will be ready for launch in a year’s time, Zachariah said. Atul Auto will continue to target tier two and three towns, he said. “We see huge untapped potential in these regions. We haven’t been able to address quite a few of these markets owing to capacity constraints.”
D. Ashakiran Kumar, analyst at brokerage First Research, has a buy rating on the stock. Kumar expects Atul Auto’s net profit to rise to Rs. 180.6 crore in the next fiscal year from Rs. 144.64 crore in the current one and net sales to increase to Rs. 3,818 crore from Rs. 3,030.75 crore.
Atul Auto’s stocks closed at Rs. 117.05 a share on BSE on Wednesday, up 0.04%. The benchmark Sensex gained 353.84 points, or 1.98%, to clsoe at 18,202.41.
The advance comes amid overall three-wheeler sales staying almost unchanged in the first 10 months of fiscal 2011-12 as high interest rates have dissuaded buyers from purchasing new vehicles. Sales have contracted 0.44% to 428,733 units from the year earlier.
Atul Auto’s marketshare went up to 5.06% from 3.55% as sales rose to 21,673 units from 15,628 units, according to data from the Society of Indian Automobile Manufacturers, or Siam.
The Rajkot-based auto maker, credited with having pioneered motorized rural transport in Gujarat, has thus far been confined to its home state and neighbouring Rajasthan. It’s now looking at establishing a national presence.
Sales have held up because banks and other auto loan providers haven’t been dissuaded by the brand name not being a widely known one, thus reposing confidence in the Atul Auto vehicles locally and overseas, especially the Gem, said J.J. Chandra, chairman and managing director.
Also See | Inching up (PDF)
“We have been working on a major market expansion plan since last year,” he said. The company’s key focus during this exercise will be the domestic market, he added. It currently exports vehicles to Kenya and Bangladesh.
Atul Auto has three models— Shakti, Smart and Gem, the last of which is a high-volume product. The recently launched Smart, an upgraded version of Shakti, will be the first Atul Auto product to be introduced in states such as Tamil Nadu and Madhya Pradesh. The company is in the process of doubling its capacity to 48,000 units per year with an investment of Rs. 8-10 crore. It’s also working on two new models—a sub-1-tonne four-wheeler that will be pitted against Tata Motors Ltd’s best-selling Ace and a small three-wheeler, said Paul Zachariah, vice-president, marketing.
Both the models will be ready for launch in a year’s time, Zachariah said. Atul Auto will continue to target tier two and three towns, he said. “We see huge untapped potential in these regions. We haven’t been able to address quite a few of these markets owing to capacity constraints.”
D. Ashakiran Kumar, analyst at brokerage First Research, has a buy rating on the stock. Kumar expects Atul Auto’s net profit to rise to Rs. 180.6 crore in the next fiscal year from Rs. 144.64 crore in the current one and net sales to increase to Rs. 3,818 crore from Rs. 3,030.75 crore.
Atul Auto’s stocks closed at Rs. 117.05 a share on BSE on Wednesday, up 0.04%. The benchmark Sensex gained 353.84 points, or 1.98%, to clsoe at 18,202.41.
Bajaj Auto not to make 4-wheeler at Chakan plant
Bajaj Auto Ltd has changed tracks on utilising the plot of land it had acquired at Chakan, near Pune, for the manufacture of 4-wheelers and has now approached the Maharashtra Industrial Development Corporation (MIDC) with a revised plan to make two- and three-wheelers there instead.
The 250-acre plot of land had been acquired in 2008 for a 4-wheeler project. This was also when the prospect of the Bajaj-Renault ultra low-cost car was its height. The relationship did not materialise as expected. BAL has in fact gone ahead with its own 4-wheeler — christened RE60 and unveiled recently — and announced that it will be made at Aurangabad.
Since MIDC rules prescribe that land allocated must be used within a specified time frame (end-2011 in this case), the Corporation sent BAL a letter on the issue. Responding to a query by Business Line on the subject, Mr Yuvraj Poman, Deputy CEO, MIDC said, “Around one month ago, Bajaj sent us a letter stating that it wanted to change the activity on this land from 4-wheelers to two and three wheelers.” The MIDC had asked the company for a Detailed Project Report (DPR) on their new plans for the Chakan land, he added.
Capacity utilisation
Bajaj Auto's Managing Director, Mr Rajiv Bajaj, did not respond to an email query seeking confirmation of the decision.
With sales numbers expected to touch over 4.5 million vehicles during the current fiscal, and total installed capacity across three manufacturing facilities in India — Chakan, Pantnagar and Aurangabad — standing at a little less than five million units, the company is nearing capacity utilisation.
“Of course we need to increase capacity,” an official of the company, who preferred to not be named, said, without commenting on plans or location of a fourth manufacturing facility.
Though last year Mr Rajiv Bajaj had hinted that the company may implement its expansion plans outside of Maharashtra, BAL already makes its Pulsar and some bikes from the KTM range at Chakan. With a plot of land and a ready supplier base, a second plant in the same locality will make eminent sense.
The 250-acre plot of land had been acquired in 2008 for a 4-wheeler project. This was also when the prospect of the Bajaj-Renault ultra low-cost car was its height. The relationship did not materialise as expected. BAL has in fact gone ahead with its own 4-wheeler — christened RE60 and unveiled recently — and announced that it will be made at Aurangabad.
Since MIDC rules prescribe that land allocated must be used within a specified time frame (end-2011 in this case), the Corporation sent BAL a letter on the issue. Responding to a query by Business Line on the subject, Mr Yuvraj Poman, Deputy CEO, MIDC said, “Around one month ago, Bajaj sent us a letter stating that it wanted to change the activity on this land from 4-wheelers to two and three wheelers.” The MIDC had asked the company for a Detailed Project Report (DPR) on their new plans for the Chakan land, he added.
Capacity utilisation
Bajaj Auto's Managing Director, Mr Rajiv Bajaj, did not respond to an email query seeking confirmation of the decision.
With sales numbers expected to touch over 4.5 million vehicles during the current fiscal, and total installed capacity across three manufacturing facilities in India — Chakan, Pantnagar and Aurangabad — standing at a little less than five million units, the company is nearing capacity utilisation.
“Of course we need to increase capacity,” an official of the company, who preferred to not be named, said, without commenting on plans or location of a fourth manufacturing facility.
Though last year Mr Rajiv Bajaj had hinted that the company may implement its expansion plans outside of Maharashtra, BAL already makes its Pulsar and some bikes from the KTM range at Chakan. With a plot of land and a ready supplier base, a second plant in the same locality will make eminent sense.
Royal Enfield plans launches, capacity ramp up
After a record sales year in 2011, iconic Bullet manufacturer Royal Enfield Motors intends to ramp up its production capacity further due to strong order book amid long waiting periods. The company also has a strong pipeline of new launches that it plans to roll out beginning second quarter of the present calendar year.
The company, part of Eicher Motors, recorded a volume growth of 42 per cent at 74,626 units in 2011 and also achieved its target of monthly production and sales of 7,000 bikes by the end of calendar year 2011. With demand continuing to outpace supply with waiting periods of over six months, the company intends to ramp up the production capacity to over 8,500 units a month by the end of 2012. “Our intent is to grow well above 90,000 units in the present calendar year,” Venki Padmanabhan, CEO, Royal Enfield Motors told Financial Chronicle.
With increasing demand from several locations across the country, Royal Enfield has also embarked on widening its reach and improving after sales services. “We have added new dealers in poorly represented markets as most of our customers have to drive over 100 kms for good service support. Last year, we crossed over 200 dealers across India. All the new dealers are investing heavily in sales and service infrastructure (service bays), and we have set up two repair technician training facilities in Chennai and Chandigarh for equipping the dealer’s staff in servicing the new Bullets sporting our new engine platform (unit construction engine) besides older iron barrel motorcycles. We have also increased our spare parts supply to the market considerably, he said.
In addition to production and dealer ramp up, the company is also charting new launches beginning middle of this year. It will launch its Thunderbird 500 motorcycle, which was showcased at the Auto Expo, in May or June. With this, it hopes to strengthen the brand position further in leisure motorcycling in the country. The next launch is that of the Cafe Racer and is expected during the first quarter of next year. “In our opinion the reintroduction of a classic racer is a new segment in India and response of its preview at the Auto Show was overwhelming,” said Padmanabhan.
“Exports will be a key focus area with significant ramp up visible from 2014-15 onwards and their contribution is expected to grow over 10 per cent from the present six per cent.
The company, part of Eicher Motors, recorded a volume growth of 42 per cent at 74,626 units in 2011 and also achieved its target of monthly production and sales of 7,000 bikes by the end of calendar year 2011. With demand continuing to outpace supply with waiting periods of over six months, the company intends to ramp up the production capacity to over 8,500 units a month by the end of 2012. “Our intent is to grow well above 90,000 units in the present calendar year,” Venki Padmanabhan, CEO, Royal Enfield Motors told Financial Chronicle.
With increasing demand from several locations across the country, Royal Enfield has also embarked on widening its reach and improving after sales services. “We have added new dealers in poorly represented markets as most of our customers have to drive over 100 kms for good service support. Last year, we crossed over 200 dealers across India. All the new dealers are investing heavily in sales and service infrastructure (service bays), and we have set up two repair technician training facilities in Chennai and Chandigarh for equipping the dealer’s staff in servicing the new Bullets sporting our new engine platform (unit construction engine) besides older iron barrel motorcycles. We have also increased our spare parts supply to the market considerably, he said.
In addition to production and dealer ramp up, the company is also charting new launches beginning middle of this year. It will launch its Thunderbird 500 motorcycle, which was showcased at the Auto Expo, in May or June. With this, it hopes to strengthen the brand position further in leisure motorcycling in the country. The next launch is that of the Cafe Racer and is expected during the first quarter of next year. “In our opinion the reintroduction of a classic racer is a new segment in India and response of its preview at the Auto Show was overwhelming,” said Padmanabhan.
“Exports will be a key focus area with significant ramp up visible from 2014-15 onwards and their contribution is expected to grow over 10 per cent from the present six per cent.
Mean machines, adult entertainment
Jayanti Mewada, 68, is the happiest man on earth. Last month, his son Mahesh bought him a super bike - a 650-cc machine. Twice a week he leaves behind his Merc at his Prahladnagar home to enjoy long drives on his Hyosung ST7, a cruiser bike, along the SG highway.
Narendra Verma, 62, a Vadodara-based industrialist, booked a Harley Davidson last week and is still waiting for his big moment. Verma had gone to a bank where he saw a sales event of the bike and booked it despite his wife's frowns.
"I remember driving a Harley in the US 30 years back. So when I saw a few men standing with the bike outside a bank last week, I relived those days," says Verma, who runs a chemical unit.
Mewada, Verma and many like them are scripting a story for this new-age 'Motorcycle Dairies'. Inspired by biker Bachchan in 'Bbuddha Hoga Tera Baap', these 60-plus men have fallen in love with super bikes.
"I have to resist excitement that comes with the attention I get on the bike... I always stay below 100 km per hour," says Mewada, who takes turns driving the mean machine with son Mahesh, a pharma enterpreneur.
There is another Mewada family on the same trip. Siddharth Mewada, 33, has gifted his 60-year-old father Deepak a super bike. "I felt it will take time for him to adjust, but he proved me wrong," says his son, who works with an IT company.
Bike makers too are surprised by the 60-plus clientele. "The bikes are heavy and powerful, and we earlier believed it's the young who will go for it. But now these men in their evening years have proved us wrong. They are more enthusiastic about bikes than some young professionals. These men are a new market for us," says Shivapada Ray, GM, sales and marketing, Garware Motors.
Narendra Verma, 62, a Vadodara-based industrialist, booked a Harley Davidson last week and is still waiting for his big moment. Verma had gone to a bank where he saw a sales event of the bike and booked it despite his wife's frowns.
"I remember driving a Harley in the US 30 years back. So when I saw a few men standing with the bike outside a bank last week, I relived those days," says Verma, who runs a chemical unit.
Mewada, Verma and many like them are scripting a story for this new-age 'Motorcycle Dairies'. Inspired by biker Bachchan in 'Bbuddha Hoga Tera Baap', these 60-plus men have fallen in love with super bikes.
"I have to resist excitement that comes with the attention I get on the bike... I always stay below 100 km per hour," says Mewada, who takes turns driving the mean machine with son Mahesh, a pharma enterpreneur.
There is another Mewada family on the same trip. Siddharth Mewada, 33, has gifted his 60-year-old father Deepak a super bike. "I felt it will take time for him to adjust, but he proved me wrong," says his son, who works with an IT company.
Bike makers too are surprised by the 60-plus clientele. "The bikes are heavy and powerful, and we earlier believed it's the young who will go for it. But now these men in their evening years have proved us wrong. They are more enthusiastic about bikes than some young professionals. These men are a new market for us," says Shivapada Ray, GM, sales and marketing, Garware Motors.
Automobiles: Hero, Tata Motors drive sector performance
Automobile makers posted a strong third-quarter performance, thanks to Tata Motors’ strong volume growth overseas.
The sector showed 28 per cent and 18 per cent growth in net sales and net profit respectively despite making provisions for currency loss.
Maruti Suzuki reported a weak performance, which though was in line with expectations.
Mahindra & Mahindra reported strong sales growth but net profit fell by almost 10 per cent. Hero MotoCorp’s sales showed a double-digit growth and a strong 40 per cent plus rise in net profit.
Bajaj Auto maintained sales and profit growth on the back of strong exports while TVS disappointed with a single-digit growth in sales and profit.
Operating margins were up marginally by 30 bps, but trend remain mixed.
Despite correction in global commodity prices, manufacturers could not benefit due to sharp rupee depreciation in the third quarter.
Tata Motors posted strongest results on the back of an impressive JLR sales growth.
Operating margins rose by 110 bps, thanks to a 60 million pound benefit from re-pricing of receivables.
The forex losses surged by whopping to Rs 164.34 crore on sharp depreciation of rupee against US dollar and Euro.
The company’s standalone operating performance continued to remain under pressure with margins at 6.4 per cent, the lowest in the last 10 quarters, impacted by elevated marketing spends and pricing pressure.
Maruti Suzuki recorded a sharp drop in operating margins, the lowest in the last nine years.
The sector showed 28 per cent and 18 per cent growth in net sales and net profit respectively despite making provisions for currency loss.
Maruti Suzuki reported a weak performance, which though was in line with expectations.
Mahindra & Mahindra reported strong sales growth but net profit fell by almost 10 per cent. Hero MotoCorp’s sales showed a double-digit growth and a strong 40 per cent plus rise in net profit.
Bajaj Auto maintained sales and profit growth on the back of strong exports while TVS disappointed with a single-digit growth in sales and profit.
Operating margins were up marginally by 30 bps, but trend remain mixed.
Despite correction in global commodity prices, manufacturers could not benefit due to sharp rupee depreciation in the third quarter.
Tata Motors posted strongest results on the back of an impressive JLR sales growth.
Operating margins rose by 110 bps, thanks to a 60 million pound benefit from re-pricing of receivables.
The forex losses surged by whopping to Rs 164.34 crore on sharp depreciation of rupee against US dollar and Euro.
The company’s standalone operating performance continued to remain under pressure with margins at 6.4 per cent, the lowest in the last 10 quarters, impacted by elevated marketing spends and pricing pressure.
Maruti Suzuki recorded a sharp drop in operating margins, the lowest in the last nine years.
Clear the irritants to New Manufacturing Policy: Tata
The Hindu Minister for Commerce and Industry, Anand Sharma with (from left) Chairman, ITC, Y. C. Deveshwar, Chairman, TVS Motors Company, Venu Srinivasan, Chairman, Tata Group, Ratan Tata, and Chairman, NMCC, V. Krishnamurthy, at the first meeting of the reconstituted National Manufacturing Competiveness Council (NMCC), in New Delhi on Friday. P
Differences persist DIPP and labour and environment ministries
Without elaborating on the hindrances, Tata Group Chairman Ratan Tata on Friday said that there were many roadblocks on the way to the implementation of the New Manufacturing Policy but said at least a good beginning had been made.
Talking to journalists after the first meeting of the revamped National Manufacturing Competitiveness Council (NMCC), Mr. Tata said there might be many roadblocks on the way to make the policy actually implementable on ground. “We are on that path and I think it is significant that a policy has been established and the government intends to stand by it,” he said.
However, the Tata Group chairman refused to elaborate on the hindrances that came in the way of smooth implementation of the policy. Things needed to be resolved, he merely said. The policy has been stuck due to failure of the labour, environment and finance ministries to issue notifications on the new policy despite the Union Cabinet having cleared it nearly four months ago.
The new policy intends to establish National Manufacturing and Investment Zones (NMIZs), including the ambitious Delhi-Mumbai Industrial Corridor (DMIC). It has projected creation of 100 million new jobs by 2022. Mr. Tata said that all the members present at the meeting appreciated the policy and discussed about the ways to accelerate manufacturing in the country.
The Labour and Environment Ministries have locked horns with the Department of Industry over the issue of certain relaxations of labour and environmental laws in the new manufacturing zones.
Commerce and Industry Minister Anand Sharma, who was also present at the meeting, said that by the end of March, all the departments were expected to notify the policy.
“The policy as such is notified. There are some notifications that need to be aligned with the Cabinet decision which is happening. I am sure by the end of next month, things will fall in line,” he added.
Besides, fiscal sops are proposed. While the Cabinet approved the NMP in October 2011, there were differences between the Department of Industrial Policy and Promotion (DIPP), on the one hand, and the ministries of labour and environment, on the other.
The meeting was chaired by industry veteran, V. Krishnamurthy. NMCC is an inter-disciplinary body which serves as a forum for promoting coherent policies for the manufacturing sector.
Differences persist DIPP and labour and environment ministries
Without elaborating on the hindrances, Tata Group Chairman Ratan Tata on Friday said that there were many roadblocks on the way to the implementation of the New Manufacturing Policy but said at least a good beginning had been made.
Talking to journalists after the first meeting of the revamped National Manufacturing Competitiveness Council (NMCC), Mr. Tata said there might be many roadblocks on the way to make the policy actually implementable on ground. “We are on that path and I think it is significant that a policy has been established and the government intends to stand by it,” he said.
However, the Tata Group chairman refused to elaborate on the hindrances that came in the way of smooth implementation of the policy. Things needed to be resolved, he merely said. The policy has been stuck due to failure of the labour, environment and finance ministries to issue notifications on the new policy despite the Union Cabinet having cleared it nearly four months ago.
The new policy intends to establish National Manufacturing and Investment Zones (NMIZs), including the ambitious Delhi-Mumbai Industrial Corridor (DMIC). It has projected creation of 100 million new jobs by 2022. Mr. Tata said that all the members present at the meeting appreciated the policy and discussed about the ways to accelerate manufacturing in the country.
The Labour and Environment Ministries have locked horns with the Department of Industry over the issue of certain relaxations of labour and environmental laws in the new manufacturing zones.
Commerce and Industry Minister Anand Sharma, who was also present at the meeting, said that by the end of March, all the departments were expected to notify the policy.
“The policy as such is notified. There are some notifications that need to be aligned with the Cabinet decision which is happening. I am sure by the end of next month, things will fall in line,” he added.
Besides, fiscal sops are proposed. While the Cabinet approved the NMP in October 2011, there were differences between the Department of Industrial Policy and Promotion (DIPP), on the one hand, and the ministries of labour and environment, on the other.
The meeting was chaired by industry veteran, V. Krishnamurthy. NMCC is an inter-disciplinary body which serves as a forum for promoting coherent policies for the manufacturing sector.
This partnership will help us improve our own capability: Pawan Munjal
Hero MotoCorp, the country’s largest two-wheeler maker, has inked an agreement with US-based Erik Buell Racing (EBR) to source high-end technology for developing new products, 14 months after its partnership with Honda Motor Corporation ended. While the agreement with Honda had cemented Hero’s footprint in the mass commuter segment, with the hugely popular Splendor and Passion, the company is now setting sights on the premium end after forging the new technological alliance. Pawan Munjal, managing director and chief executive, Hero MotoCorp, outlined his vision for the company in an interview with Sharmistha Mukherjee and Surajeet Dasgupta. Edited excerpts:
The agreement with Honda had ensured steady supply of technological assets which strengthen your position in the two-wheeler market in India. What kind of alliance are you looking at with EBR?
We are looking for multiple technological alliances, unlike a single joint venture partner we had earlier. We have formed a strategic partnership with EBR, which is a company based in the United States. The founder was a racer who started a company of his own to manufacture motorcycles. The outfit is far ahead on technological assets. Our visions are similar, we want the best for our customers in terms of environment sustainability and the technology we offer. In fact, Leap, the hybrid scooter we showcased at the Auto Expo, has been developed with the help of EBR.
When you talk of technological support, would it be limited to sourcing engine technology from your US partner?
We have formed a strategic partnership with EBR for various capabilities. We will work together on the supply chain and on technology across product lines. They will provide us with engine technology. But what is more important is, they will help us in improving our own capability and enable us to become a self-sufficient engineering company.
EBR is more into the performance biking segment. Does the tie-up mean Hero MotoCorp is looking at moving up the value chain?
The products we are working on with EBR would have more high-end technology. EBR itself has been into performance biking and we are gradually stepping up. The technology we get from EBR for premium bikes can be considered for use in products in the mass segment, as well. But the competence we gain can be applied across product categories, be it scooters or motorcycles. The first product we started working on with EBR was the hybrid scooter Leap. And, we are seriously working on producing it commercially.
The commuter segment has been the forte of the Hero Group. But the first product you introduced under the Hero brand has been the Impulse. Now, comes the agreement with EBR. Would we see more products from Hero in the premium category?
Our market was at the 100-cc category, but we are not restricting ourselves to that end. We are not switching segments, we will continue to work on those areas and upgrade technology there. But we were completely missing from the premium end of the market. We will focus there. Moreover, our market is global now, we are not looking only at the domestic industry. So, whatever we design now, we will design keeping the global consumer in mind.
Hero has evinced interest in the hybrid space, what about electric two-wheelers?
We will stay with hybrid technology for now, because all other companies are working on electric two-wheelers. I was restricted earlier because of the JV with Honda. But being a responsible company, we will now look at eco-friendly technology.
The agreement with Honda had ensured steady supply of technological assets which strengthen your position in the two-wheeler market in India. What kind of alliance are you looking at with EBR?
We are looking for multiple technological alliances, unlike a single joint venture partner we had earlier. We have formed a strategic partnership with EBR, which is a company based in the United States. The founder was a racer who started a company of his own to manufacture motorcycles. The outfit is far ahead on technological assets. Our visions are similar, we want the best for our customers in terms of environment sustainability and the technology we offer. In fact, Leap, the hybrid scooter we showcased at the Auto Expo, has been developed with the help of EBR.
When you talk of technological support, would it be limited to sourcing engine technology from your US partner?
We have formed a strategic partnership with EBR for various capabilities. We will work together on the supply chain and on technology across product lines. They will provide us with engine technology. But what is more important is, they will help us in improving our own capability and enable us to become a self-sufficient engineering company.
EBR is more into the performance biking segment. Does the tie-up mean Hero MotoCorp is looking at moving up the value chain?
The products we are working on with EBR would have more high-end technology. EBR itself has been into performance biking and we are gradually stepping up. The technology we get from EBR for premium bikes can be considered for use in products in the mass segment, as well. But the competence we gain can be applied across product categories, be it scooters or motorcycles. The first product we started working on with EBR was the hybrid scooter Leap. And, we are seriously working on producing it commercially.
The commuter segment has been the forte of the Hero Group. But the first product you introduced under the Hero brand has been the Impulse. Now, comes the agreement with EBR. Would we see more products from Hero in the premium category?
Our market was at the 100-cc category, but we are not restricting ourselves to that end. We are not switching segments, we will continue to work on those areas and upgrade technology there. But we were completely missing from the premium end of the market. We will focus there. Moreover, our market is global now, we are not looking only at the domestic industry. So, whatever we design now, we will design keeping the global consumer in mind.
Hero has evinced interest in the hybrid space, what about electric two-wheelers?
We will stay with hybrid technology for now, because all other companies are working on electric two-wheelers. I was restricted earlier because of the JV with Honda. But being a responsible company, we will now look at eco-friendly technology.
Power Ride - Apache RTR 180 ABS
BIKE lovers have something to cheer about ~ TVS has introduced anti-lock braking system on two wheelers for the first time in the country. Experts say that by 2020 India will be the biggest hub for small cars and motorcycles in Asia. All big automobile manufacturers have opened workshops in the country. Even Harley-Davidson, the great American giant, has opened its showroom in Hyderabad and Harley motorcycle gangs are now seen in the country. Kawasaki and Suzuki have opened plants and are manufacturing heavy duty motorcycles. Those who regularly ply highways must have come across motorcycle teams on cross-country journeys. Visiting Ladakh and Leh on bikes is now common.
Kolkata was once the hub for muscle bikes during the British period. There were Nortons, BSAs, BMWs and Matchless. Now it is amazing to note that traffic sergeants used to ride Harley-Davidsons with sidecars. In the 1970s and ‘80s bike experts Biswanath Ghosh and Kamal Bhandari had imported Honda and BMW motorcycles. A new chapter opened when 100cc motorcycles were introduced in the late 1980s. These bikes were light and offered good mileage. These bikes were used mainly for commuting and the lighter bikes forced Royal Enfield to update its engine, and make them fuel-efficient.
The TVS Apache 180 is unique because of its anti-lock braking system. Some up-market cars have it but this is the first two-wheeler to have this feature. Because of poor road conditions it is essential to have a motorcycle with a fine braking system. In fact, nearly 75 percent bike accidents on highways in due to poor braking. The ABS prevents locking of the bike when brakes are suddenly applied.
The Apache can be driven on any terrain because it offers superb balance even at low speeds. Powerful headlamps make night driving a pleasure. The bike has a sporty look that should attract youngsters. One advice: Do not accelerate abruptly. Take a test drive and be charmed by the power of the bike.
Kolkata was once the hub for muscle bikes during the British period. There were Nortons, BSAs, BMWs and Matchless. Now it is amazing to note that traffic sergeants used to ride Harley-Davidsons with sidecars. In the 1970s and ‘80s bike experts Biswanath Ghosh and Kamal Bhandari had imported Honda and BMW motorcycles. A new chapter opened when 100cc motorcycles were introduced in the late 1980s. These bikes were light and offered good mileage. These bikes were used mainly for commuting and the lighter bikes forced Royal Enfield to update its engine, and make them fuel-efficient.
The TVS Apache 180 is unique because of its anti-lock braking system. Some up-market cars have it but this is the first two-wheeler to have this feature. Because of poor road conditions it is essential to have a motorcycle with a fine braking system. In fact, nearly 75 percent bike accidents on highways in due to poor braking. The ABS prevents locking of the bike when brakes are suddenly applied.
The Apache can be driven on any terrain because it offers superb balance even at low speeds. Powerful headlamps make night driving a pleasure. The bike has a sporty look that should attract youngsters. One advice: Do not accelerate abruptly. Take a test drive and be charmed by the power of the bike.
Yamaha looks at making 250 cc sports bikes
Gauging at the success of the 250cc sports bike retailed by Honda, fellow Japanese competitor Yamaha is also gearing up for local manufacturing of its planned 250cc sports bike, as against assembly operations done by Bajaj Auto for Kawasaki.
A locally manufactured motorcycle will entail zero duty, thereby, allowing the company to price the product competitively as against 30 per cent duty attracted by an assembled product, where different parts of the bike are imported to be assembled together.
Arch-rival Honda Motorcycle and Scooter India (HMSI) has been clocking an average of 3,000 units every month on the CBR250R sports bike, which the it fully makes in India. Over the last few months, Honda is in the process of phasing out the CBR250R, to make way for the new 2012 model.
Roy Kurian, national business head, India Yamaha Motor, said, "The market for 250cc is growing and we are studying that. There are a couple of models in that segment and people are upgrading to 250cc bikes. We will do 100 per cent localisation of that bike...we will manufacture it here."
Talks about Yamaha launching a 250cc bike has been doing the rounds for several months, but the company has only delayed its entry into the segment. "We have taken the feedback from people who have bought 200-250cc bikes and our feedback says they are not fully 'satisfied' with their products. So there is a need for a better bike than what is available today. Internationally, we have the Fazer 250, but I cannot comment when we will launch a bike in that segment,” added Kurian.
Bajaj Auto imports several parts of the 250cc-powered Kawasaki Ninja into India, before assembling them at its plant in Chakan, Pune. Due to added duties, the Ninja is priced well above the price position of the Honda CBR 250R. While the Ninja costs Rs 300,000 (on-road Mumbai), Honda's CBR250R costs nearly half of that at Rs 155,000 (on-road Mumbai). Reports suggest that Yamaha has been doing a market study for a 250cc bike, which according to sources was scheduled for launch last year. However, the management decided to gauge the response for the Honda CBR250R.
This year, Yamaha has decided to focus on scooters, which is scheduled for launch in the second half. It is confident of achieving sales of 400,000 units (including exports) in the next year. This would constitute 40 per cent of total targeted sales of one million by 2013, said Kurian.
A locally manufactured motorcycle will entail zero duty, thereby, allowing the company to price the product competitively as against 30 per cent duty attracted by an assembled product, where different parts of the bike are imported to be assembled together.
Arch-rival Honda Motorcycle and Scooter India (HMSI) has been clocking an average of 3,000 units every month on the CBR250R sports bike, which the it fully makes in India. Over the last few months, Honda is in the process of phasing out the CBR250R, to make way for the new 2012 model.
Roy Kurian, national business head, India Yamaha Motor, said, "The market for 250cc is growing and we are studying that. There are a couple of models in that segment and people are upgrading to 250cc bikes. We will do 100 per cent localisation of that bike...we will manufacture it here."
Talks about Yamaha launching a 250cc bike has been doing the rounds for several months, but the company has only delayed its entry into the segment. "We have taken the feedback from people who have bought 200-250cc bikes and our feedback says they are not fully 'satisfied' with their products. So there is a need for a better bike than what is available today. Internationally, we have the Fazer 250, but I cannot comment when we will launch a bike in that segment,” added Kurian.
Bajaj Auto imports several parts of the 250cc-powered Kawasaki Ninja into India, before assembling them at its plant in Chakan, Pune. Due to added duties, the Ninja is priced well above the price position of the Honda CBR 250R. While the Ninja costs Rs 300,000 (on-road Mumbai), Honda's CBR250R costs nearly half of that at Rs 155,000 (on-road Mumbai). Reports suggest that Yamaha has been doing a market study for a 250cc bike, which according to sources was scheduled for launch last year. However, the management decided to gauge the response for the Honda CBR250R.
This year, Yamaha has decided to focus on scooters, which is scheduled for launch in the second half. It is confident of achieving sales of 400,000 units (including exports) in the next year. This would constitute 40 per cent of total targeted sales of one million by 2013, said Kurian.
Hero MotoCorp to buy minority stake in EBR
Hero MotoCorp, the world's largest two-wheeler maker, will buy a minority stake in US motorcycle firm Erik Buell Racing (EBR) for an undisclosed amount.
"We have a flexible free-flowing pact with EBR, which would be developed into a equity partnership," Hero MotoCorp MD and CEO Pawan Munjal said. The move is aimed at securing uninterrupted technological support from the US racing motorcycle maker once associated with iconic brand Harley-Davidson.
After Hero parted ways with Japanese major Honda, its partner for 27 years, last year, industry watchers had identified lack of cutting-edge technology as the biggest challenge for the Indian firm to hold on to its leadership position in the market. Hero had last week announced a technology tie-up with EBR, its first partnership after splitting with Honda.
By buying a stake, Hero can have a higher say in the US marquee firm and use the partnership to get a foothold in overseas markets. As we turn global, which is our long cherished aim, EBR is a strategic fit that will help us gain traction in overseas markets," Munjal said.
He refused to give the financial details of the deal. The overseas investment, likely to happen early next fiscal, will be a step forward for the cash-rich company in its effort to get out of the shadow of Honda, which has become one of its toughest rivals in the domestic market after the March split.
Hero sells over six million twowheelers every year in India where it holds 56% market share. Under the joint-venture agreement with Honda, Munjals-owned Hero was restrained from exporting vehicles.
"We would look forward to have both technological alliance and partnership with Hero Moto-Corp in the future," EBR chief promoter Erik Buell said, adding, "A marriage would lead to huge synergies in the long-term." EBR has an annual capacity of 15,000 units. Hero has not ruled out more such partnerships.
"We are open to all options as we move into being a diversified automotive company," Munjal had said last week. While Hero was restrained from tapping foreign markets, other Indian two-wheeler makers, such as Bajaj Auto, have made successful forays overseas. Bajaj, which started as a minority shareholder in Austria's KTM, is now its biggest overseas investor with 40% stake.
After the collapse of the Honda JV, Hero has started setting up sales and distribution channels cross Africa, Latin America and Southeast Asia for its motorcycles and scooters.
The Munjal-family that owns 52% stake in the company plans to increase its exposure to overseas market which it wasn't allowed until 2010 by Honda that operates 28 motorcycle production bases in 21 countries (as of April 2011) globally.
Hero is largely India based entity with over 98% of its sales limited to the domestic market. The ownership in the American company is expected to enable Hero to develop fresh technology and churn out new products faster as it compete with its erstwhile ally Honda amongst others.
"We have a flexible free-flowing pact with EBR, which would be developed into a equity partnership," Hero MotoCorp MD and CEO Pawan Munjal said. The move is aimed at securing uninterrupted technological support from the US racing motorcycle maker once associated with iconic brand Harley-Davidson.
After Hero parted ways with Japanese major Honda, its partner for 27 years, last year, industry watchers had identified lack of cutting-edge technology as the biggest challenge for the Indian firm to hold on to its leadership position in the market. Hero had last week announced a technology tie-up with EBR, its first partnership after splitting with Honda.
By buying a stake, Hero can have a higher say in the US marquee firm and use the partnership to get a foothold in overseas markets. As we turn global, which is our long cherished aim, EBR is a strategic fit that will help us gain traction in overseas markets," Munjal said.
He refused to give the financial details of the deal. The overseas investment, likely to happen early next fiscal, will be a step forward for the cash-rich company in its effort to get out of the shadow of Honda, which has become one of its toughest rivals in the domestic market after the March split.
Hero sells over six million twowheelers every year in India where it holds 56% market share. Under the joint-venture agreement with Honda, Munjals-owned Hero was restrained from exporting vehicles.
"We would look forward to have both technological alliance and partnership with Hero Moto-Corp in the future," EBR chief promoter Erik Buell said, adding, "A marriage would lead to huge synergies in the long-term." EBR has an annual capacity of 15,000 units. Hero has not ruled out more such partnerships.
"We are open to all options as we move into being a diversified automotive company," Munjal had said last week. While Hero was restrained from tapping foreign markets, other Indian two-wheeler makers, such as Bajaj Auto, have made successful forays overseas. Bajaj, which started as a minority shareholder in Austria's KTM, is now its biggest overseas investor with 40% stake.
After the collapse of the Honda JV, Hero has started setting up sales and distribution channels cross Africa, Latin America and Southeast Asia for its motorcycles and scooters.
The Munjal-family that owns 52% stake in the company plans to increase its exposure to overseas market which it wasn't allowed until 2010 by Honda that operates 28 motorcycle production bases in 21 countries (as of April 2011) globally.
Hero is largely India based entity with over 98% of its sales limited to the domestic market. The ownership in the American company is expected to enable Hero to develop fresh technology and churn out new products faster as it compete with its erstwhile ally Honda amongst others.
Hero MotoCorp, EBR ink tech-sourcing pact
The country’s largest two-wheeler maker Hero MotoCorp on Wednesday said it has entered into technology sourcing pact with US-based Erik Buell Racing as it looks to strengthen presence in the high-end bike segment. The development is a part of the Indian firm’s strategy to enhance technological prowess, post the break up of the erstwhile joint venture with Honda — Hero Honda. “We are entering into a strategic partnership with Erik Buell Racing (EBR), which currently is more into high end and high performance racing bikes as we are completely missing in this category of motorcycles,” Hero MotoCorp MD and CEO Pawan Munjal said.
2- wheelers may switch to slow lane next fiscal
Even when car companies took a knock on higher prices, fuel costs and interest rates, two-wheeler sales remained the bright spot, soaring 25% in 2009-10 and 2010-11. That may be about to change.
Leading two-wheeler makers Hero MotoCorp, Bajaj Auto and TVS Motor have sharply reduced their sales growth forecast for the fiscal on high base effect, finance costs and tepid crop growth in some places. Since two-wheelers make up three-fourths of the country’s automobile market, any drop in growth will bring down aggregate auto sales and have a direct impact on manufacturing as a whole.
Even when car sales fell 2.28% in April-December —the worst in over three years — rural markets buoyed two-wheelers. Motorcycle, moped and scooter sales grew 15% during the period to nearly 10 million units against 8.6 million units in the corresponding previous period.
However, in December and January, sales growth fell on a sequential basis, setting off alarm bells at
the three two-wheeler manufacturers.
Bajaj Auto, India’s second largest two-wheeler maker, feels January-March growth could be just 5%.
At an analysts’ meet last month after announcing the company’s third-quarter results, Kevin D’sa, president (finance) at Bajaj Auto, the country’s second-largest two-wheeler maker, had pointed to the industry’s flat December sales and estimated a fourth-quarter growth of just 5%. “The 5% growth in the fourth quarter is not going to become 12% from April 1,” he quipped. He, however, added that over the long term, ie, three to five years, the industry could clock a growth of 12%.
TVS Motor chairman Venu Srinivasan told FE that a combination of factors — the slowdown in agricultural growth, high fiscal deficit and cost of finance — would drag two-wheeler sales growth to a single digit or low double digits in the next two years. “Interest rates may have peaked, but if you take the high fiscal deficit into account, it will have an impact on two-wheeler sales,” he added.
Hero MotoCorp painted a more optimistic picture, projecting 10-12% growth for the fourth quarter —from 17-18% in the previous two quarters and almost 25% over the previous two years.
Senior vice-president (sales & marketing) Anil Dua recently told analysts that while his company's sales grew 20% in the festive season, December had seen some deceleration for the broader industry. “Industry growth for December quarter has come down to 11% from 17-18% in the last two quarters,” Dua said.
Honda Motorcycles and Scooters India sounded the most bullish. Vice-president (sales & marketing), NK Rattan said the company's outlook for Q4 remains “unchanged”. He expects HMSI sales to grow 40% in the ongoing quarter with total sales of 21 lakh units in the fiscal.
Vaishali Jajoo of Aegon Religare Life Insurance who tracks the automobile sector said: “The two-wheeler sector could be under some
pressure due to factors like inflation, which is eating
into disposable incomes, higher cost of financing
and lower crop growth in certain areas”.
Leading two-wheeler makers Hero MotoCorp, Bajaj Auto and TVS Motor have sharply reduced their sales growth forecast for the fiscal on high base effect, finance costs and tepid crop growth in some places. Since two-wheelers make up three-fourths of the country’s automobile market, any drop in growth will bring down aggregate auto sales and have a direct impact on manufacturing as a whole.
Even when car sales fell 2.28% in April-December —the worst in over three years — rural markets buoyed two-wheelers. Motorcycle, moped and scooter sales grew 15% during the period to nearly 10 million units against 8.6 million units in the corresponding previous period.
However, in December and January, sales growth fell on a sequential basis, setting off alarm bells at
the three two-wheeler manufacturers.
Bajaj Auto, India’s second largest two-wheeler maker, feels January-March growth could be just 5%.
At an analysts’ meet last month after announcing the company’s third-quarter results, Kevin D’sa, president (finance) at Bajaj Auto, the country’s second-largest two-wheeler maker, had pointed to the industry’s flat December sales and estimated a fourth-quarter growth of just 5%. “The 5% growth in the fourth quarter is not going to become 12% from April 1,” he quipped. He, however, added that over the long term, ie, three to five years, the industry could clock a growth of 12%.
TVS Motor chairman Venu Srinivasan told FE that a combination of factors — the slowdown in agricultural growth, high fiscal deficit and cost of finance — would drag two-wheeler sales growth to a single digit or low double digits in the next two years. “Interest rates may have peaked, but if you take the high fiscal deficit into account, it will have an impact on two-wheeler sales,” he added.
Hero MotoCorp painted a more optimistic picture, projecting 10-12% growth for the fourth quarter —from 17-18% in the previous two quarters and almost 25% over the previous two years.
Senior vice-president (sales & marketing) Anil Dua recently told analysts that while his company's sales grew 20% in the festive season, December had seen some deceleration for the broader industry. “Industry growth for December quarter has come down to 11% from 17-18% in the last two quarters,” Dua said.
Honda Motorcycles and Scooters India sounded the most bullish. Vice-president (sales & marketing), NK Rattan said the company's outlook for Q4 remains “unchanged”. He expects HMSI sales to grow 40% in the ongoing quarter with total sales of 21 lakh units in the fiscal.
Vaishali Jajoo of Aegon Religare Life Insurance who tracks the automobile sector said: “The two-wheeler sector could be under some
pressure due to factors like inflation, which is eating
into disposable incomes, higher cost of financing
and lower crop growth in certain areas”.
Industrial growth slumps to 1.8%
Confirming the advance projections of a scaled-down GDP (gross domestic product) expansion at 6.9 per cent for the current fiscal, industrial output in December was disappointing, growing by a mere 1.8 per cent in the wake of poor shows by the major sectors such as manufacturing and mining.
Even as factory output growth, as measured by the index of industrial production (IIP), slipped to such a dismal level in December 2011 from a comparatively healthy 5.94 per cent in November and a more robust 8.1 per cent in the same month a year ago, Finance Minister Pranab Mukherjee termed the figures as “disappointing” but expressed cautious optimism on a likely revival in the remaining months of 2011-12.
“[The] IIP [growth data] is disappointing ... I hope, from the next couple of months, it will start improving,” Mr. Mukherjee said. However, with India Inc. pointing to the slowdown signals and pleading for measures to revive industrial and economic growth, it is likely that the Reserve Bank of India (RBI) will take heed and take appropriate steps during its mid-quarterly policy review next month.
The IIP data released here on Friday revealed that the December output of the manufacturing sector — constituting over 75 per cent of the index — grew by a dismal 1.8 per cent as compared to a smart 8.7 per cent expansion in the same month of 2010.
More specifically, within the manufacturing sector, the capital goods segment — which signifies investment by corporates — saw a contraction of 16.5 per cent as compared to a robust growth of 20.2 per cent in December 2010.
Alongside, the mining sector output also dipped into negative by 3.7 per cent during the month as against a 5.9 per cent growth a year ago.
According to Prime Minister's Economic Advisory Council Chairman C. Rangarajan, investment sentiment would see a revival in the next three months. “There are indications of revival in factory output in January-March quarter as mining sector would show improvement as coal output is expected to rise,” he said.
Owing to the poor show in December, the IIP growth during April-December 2011 now stands pegged at 3.6 per cent as against 8.3 per cent in the same period of the previous fiscal year.
Commenting on the December factory output data, Planning Commission Deputy Chairman Montek Singh Ahluwalia viewed that the slide in industrial growth was likely to bottom out in the third quarter and then revive in the January-March period.
Apex chamber FICCI pointed out that in view of the fall in industrial output, “the coming Budget should not look at any increase in the excise duty for the manufacturing sector. Also, RBI should bring down the interest rates.”
The poor IIP numbers, however, were on expected lines as the core industries had also shown a subdued growth of 3.1 per cent in December owing to a lag in output of crude oil, steel and natural gas.
Among other IIP segments, output of basic goods rose by four per in December 2011 as compared to 7.8 per cent in the year-ago period while intermediate goods saw a contraction of 2.8 per cent as against 8.1 per cent growth in December 2010.
The only positive element was the consumer goods sector which witnessed a higher growth of 10 per cent during the month as compared to low 3.5 per cent increase in December 2010.
Even as factory output growth, as measured by the index of industrial production (IIP), slipped to such a dismal level in December 2011 from a comparatively healthy 5.94 per cent in November and a more robust 8.1 per cent in the same month a year ago, Finance Minister Pranab Mukherjee termed the figures as “disappointing” but expressed cautious optimism on a likely revival in the remaining months of 2011-12.
“[The] IIP [growth data] is disappointing ... I hope, from the next couple of months, it will start improving,” Mr. Mukherjee said. However, with India Inc. pointing to the slowdown signals and pleading for measures to revive industrial and economic growth, it is likely that the Reserve Bank of India (RBI) will take heed and take appropriate steps during its mid-quarterly policy review next month.
The IIP data released here on Friday revealed that the December output of the manufacturing sector — constituting over 75 per cent of the index — grew by a dismal 1.8 per cent as compared to a smart 8.7 per cent expansion in the same month of 2010.
More specifically, within the manufacturing sector, the capital goods segment — which signifies investment by corporates — saw a contraction of 16.5 per cent as compared to a robust growth of 20.2 per cent in December 2010.
Alongside, the mining sector output also dipped into negative by 3.7 per cent during the month as against a 5.9 per cent growth a year ago.
According to Prime Minister's Economic Advisory Council Chairman C. Rangarajan, investment sentiment would see a revival in the next three months. “There are indications of revival in factory output in January-March quarter as mining sector would show improvement as coal output is expected to rise,” he said.
Owing to the poor show in December, the IIP growth during April-December 2011 now stands pegged at 3.6 per cent as against 8.3 per cent in the same period of the previous fiscal year.
Commenting on the December factory output data, Planning Commission Deputy Chairman Montek Singh Ahluwalia viewed that the slide in industrial growth was likely to bottom out in the third quarter and then revive in the January-March period.
Apex chamber FICCI pointed out that in view of the fall in industrial output, “the coming Budget should not look at any increase in the excise duty for the manufacturing sector. Also, RBI should bring down the interest rates.”
The poor IIP numbers, however, were on expected lines as the core industries had also shown a subdued growth of 3.1 per cent in December owing to a lag in output of crude oil, steel and natural gas.
Among other IIP segments, output of basic goods rose by four per in December 2011 as compared to 7.8 per cent in the year-ago period while intermediate goods saw a contraction of 2.8 per cent as against 8.1 per cent growth in December 2010.
The only positive element was the consumer goods sector which witnessed a higher growth of 10 per cent during the month as compared to low 3.5 per cent increase in December 2010.
For Rich, Bikes Now Magic Bullet for Stress
Six months ago, Laju Augustine was determined to buy a Toyota Fortuner. The 34-year-old head of sales at Cushman & Wakefield, whose family owns a fleet of cars, was keen to upgrade to the luxury sports utility vehicle with an on-road price tag of just under Rs 25 lakh. But the Fortuner never made it into Augustine's garage. Instead, he found himself cruising on a Harley-Davidson SuperLow, his first bike. "I used up the money (budgeted) for a Fortuner to buy a bike for the sheer leisure of riding," he says.
Augustine is one of many of India's well-heeled who are discovering the joys of easy riding with the wind in their hair and adrenaline in their veins. Some of the converts to biking were till recently diehard believers in SUVs, another symbol of adventure and escape into the great outdoors.
Thanks, however, to a clutch of leisure and performance bike makers such as Harley-Davidson, Triumph, Ducati, Suzuki, BMW Motorad, KTM and Kawasaki (the last two via Bajaj Auto) launching heavy premium mobikes in the Rs 10-40 lakh bracket, biking is the new weekend fad for India's loaded set. As Sanjay Tripathi, marketing director at Harley-Davidson India says: "Till recently, SUVs were considered outdoor vehicles. Now the big bikes are becoming the 'getaway vehicles'."
Consider, for instance, Delhibased retailer Ajai Gupta, who owns four SUVs: a Porsche Cayenne, a Toyota Land Cruiser, aVolvo XC90 and a Toyota Fortuner. Gupta's next acquisition: the 1800cc Suzuki Intruder for Rs 14 lakh. "While SUVs are spacious off-roaders and comfortable to drive, high-end bikes give a totally different thrill," says the 47-year-old entrepreneur.
SUV Owners Take to 2 Wheels
And Gupta is no noveau riche novice on a spree to collect wheels for snob value or to keep up with the affluent Joneses. He knows his cranks and chain rings. Evidence: the technology for the Suzuki Intruder is far more advanced as it is shaft-driven (not chain-driven like most bikes) and liquid-cooled (as opposed to air-cooled), giving it a car-like feel, explains Gupta.
SUV owners, it would seem, are more likely to take a shine to Fat Boys (Harley's iconic heavyweights) and Speed Triples (Triumph's popular model). Gopal Machani owns two SUVs - one an Audi Q7 and the other a BMW X1.
Recently, the 28-year-old, who is involved in the family business of automobiles and real estate, acquired the power-packed Triumph Rocket III Roadster for Rs 20 lakh. "After a tough week at work, riding this 2300cc Roadster is a stress buster," says Gopal, who sets off early morning on weekends for a long, easy ride. "It makes me feel I am para-gliding," adds the biking fanatic.
Another SUV buff-turned-biker is Captain Ravee (he insists that's his name, with no surname). The 42-year-old ex-army man, who now manages an education institute and owns a Mitsubishi Pajero and a Suzuki Grand Vitara, recently bought a Suzuki Intruder. He says the vibrations of the 1800cc superbike give him an adrenaline rush and transport him into a different world. On most weekends he rides an average of 800 km, from Delhi to Jodhpur, Delhi to Dalhousie and Delhi to Narkhanda (and back).
Augustine is one of many of India's well-heeled who are discovering the joys of easy riding with the wind in their hair and adrenaline in their veins. Some of the converts to biking were till recently diehard believers in SUVs, another symbol of adventure and escape into the great outdoors.
Thanks, however, to a clutch of leisure and performance bike makers such as Harley-Davidson, Triumph, Ducati, Suzuki, BMW Motorad, KTM and Kawasaki (the last two via Bajaj Auto) launching heavy premium mobikes in the Rs 10-40 lakh bracket, biking is the new weekend fad for India's loaded set. As Sanjay Tripathi, marketing director at Harley-Davidson India says: "Till recently, SUVs were considered outdoor vehicles. Now the big bikes are becoming the 'getaway vehicles'."
Consider, for instance, Delhibased retailer Ajai Gupta, who owns four SUVs: a Porsche Cayenne, a Toyota Land Cruiser, aVolvo XC90 and a Toyota Fortuner. Gupta's next acquisition: the 1800cc Suzuki Intruder for Rs 14 lakh. "While SUVs are spacious off-roaders and comfortable to drive, high-end bikes give a totally different thrill," says the 47-year-old entrepreneur.
SUV Owners Take to 2 Wheels
And Gupta is no noveau riche novice on a spree to collect wheels for snob value or to keep up with the affluent Joneses. He knows his cranks and chain rings. Evidence: the technology for the Suzuki Intruder is far more advanced as it is shaft-driven (not chain-driven like most bikes) and liquid-cooled (as opposed to air-cooled), giving it a car-like feel, explains Gupta.
SUV owners, it would seem, are more likely to take a shine to Fat Boys (Harley's iconic heavyweights) and Speed Triples (Triumph's popular model). Gopal Machani owns two SUVs - one an Audi Q7 and the other a BMW X1.
Recently, the 28-year-old, who is involved in the family business of automobiles and real estate, acquired the power-packed Triumph Rocket III Roadster for Rs 20 lakh. "After a tough week at work, riding this 2300cc Roadster is a stress buster," says Gopal, who sets off early morning on weekends for a long, easy ride. "It makes me feel I am para-gliding," adds the biking fanatic.
Another SUV buff-turned-biker is Captain Ravee (he insists that's his name, with no surname). The 42-year-old ex-army man, who now manages an education institute and owns a Mitsubishi Pajero and a Suzuki Grand Vitara, recently bought a Suzuki Intruder. He says the vibrations of the 1800cc superbike give him an adrenaline rush and transport him into a different world. On most weekends he rides an average of 800 km, from Delhi to Jodhpur, Delhi to Dalhousie and Delhi to Narkhanda (and back).
India car sales head for first annual fall in 10 years
Annual car sales in India are likely to drop for the first time since 2002 in the fiscal year ending March after January sales fell short of expectations, an industry body said.
Car sales, which grew 30 percent in the year ending March 2011, posted their first monthly fall in three years last July as high financing and running costs deterred buyers.
"The car industry is too sensitive to interest rates, and we don't see interest rates coming down quickly," Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers (SIAM), told reporters on Wednesday.
"Unless sales grow in February-March at 10 to 12 percent, which is unlikely, the industry will miss the sales projection," he said, referring to its forecast for zero to 2 percent growth.
Indian car sales have risen every year since the fiscal year that ended in March 2002, according to SIAM data.
Car sales rose 7.2 percent in January from a year earlier, the third consecutive monthly rise, but less than required for automakers to make up for record sales falls in late 2011.
Sales rose in November and December, offering encouragement to an industry that had experienced four consecutive months of falling sales.
SIAM expects vehicle sales to increase by 11 to 13 percent in the fiscal year starting on April 1 if the Reserve Bank of India begins to ease interest rates soon. The central bank has raised interest rates 13 times since March 2010 in its battle against stubborn inflation.
"The market has factored in falling sales this year, given how much sentiment has been subdued by high interest rates," said Nikhil Deshpande, auto analyst at PINC Research in Mumbai.
"You won't see substantial growth until rates start coming down, not before March or April, and people begin to get used to the higher petrol prices," Deshpande added.
TEPID JANUARY GROWTH
Automakers sold 196,013 cars last month, SIAM said. Total car sales for the fiscal year to January stood at 1.57 million, down 1.19 percent from the period a year earlier.
Indian car sales are mainly driven by a rapidly expanding middle class that is typically reliant on loans for purchases.
Many companies have offered large discounts in recent months as well as trade-in deals for motorcycles -- a family vehicle in India -- to tempt first-time buyers.
India's once-soaring sales growth has spurred a slew of global carmakers such as Ford Motor Co and General Motors Co to ramp up their operations in Asia's third-largest economy in search of growth.
A large, young population, low penetration and rising incomes are seen driving long-term car demand in India, and industry executives last month said that the current sales slowdown was a temporary phase.
Market leader Maruti Suzuki, whose sales fell by a record amount in October due to crippling strikes, said sales rose 5.2 percent in January, its first monthly rise since May.
Maruti, 54.2 percent owned by Japan's Suzuki Motor, expects its sales to be 11 percent lower in the current fiscal year, and last month reported a 64 percent fall in profit for the December quarter, on a 17.4 percent slide in sales.
Motorcycle sales, which have remained strong over the past year, rose 10.51 percent to 825,887 last month. The increase is less than SIAM's growth rate forecast of 13 to 15 percent for the current fiscal year.
Sales of trucks and buses, a key economic indicator, rose 13.5 percent in January to 69,859.
Car sales, which grew 30 percent in the year ending March 2011, posted their first monthly fall in three years last July as high financing and running costs deterred buyers.
"The car industry is too sensitive to interest rates, and we don't see interest rates coming down quickly," Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers (SIAM), told reporters on Wednesday.
"Unless sales grow in February-March at 10 to 12 percent, which is unlikely, the industry will miss the sales projection," he said, referring to its forecast for zero to 2 percent growth.
Indian car sales have risen every year since the fiscal year that ended in March 2002, according to SIAM data.
Car sales rose 7.2 percent in January from a year earlier, the third consecutive monthly rise, but less than required for automakers to make up for record sales falls in late 2011.
Sales rose in November and December, offering encouragement to an industry that had experienced four consecutive months of falling sales.
SIAM expects vehicle sales to increase by 11 to 13 percent in the fiscal year starting on April 1 if the Reserve Bank of India begins to ease interest rates soon. The central bank has raised interest rates 13 times since March 2010 in its battle against stubborn inflation.
"The market has factored in falling sales this year, given how much sentiment has been subdued by high interest rates," said Nikhil Deshpande, auto analyst at PINC Research in Mumbai.
"You won't see substantial growth until rates start coming down, not before March or April, and people begin to get used to the higher petrol prices," Deshpande added.
TEPID JANUARY GROWTH
Automakers sold 196,013 cars last month, SIAM said. Total car sales for the fiscal year to January stood at 1.57 million, down 1.19 percent from the period a year earlier.
Indian car sales are mainly driven by a rapidly expanding middle class that is typically reliant on loans for purchases.
Many companies have offered large discounts in recent months as well as trade-in deals for motorcycles -- a family vehicle in India -- to tempt first-time buyers.
India's once-soaring sales growth has spurred a slew of global carmakers such as Ford Motor Co and General Motors Co to ramp up their operations in Asia's third-largest economy in search of growth.
A large, young population, low penetration and rising incomes are seen driving long-term car demand in India, and industry executives last month said that the current sales slowdown was a temporary phase.
Market leader Maruti Suzuki, whose sales fell by a record amount in October due to crippling strikes, said sales rose 5.2 percent in January, its first monthly rise since May.
Maruti, 54.2 percent owned by Japan's Suzuki Motor, expects its sales to be 11 percent lower in the current fiscal year, and last month reported a 64 percent fall in profit for the December quarter, on a 17.4 percent slide in sales.
Motorcycle sales, which have remained strong over the past year, rose 10.51 percent to 825,887 last month. The increase is less than SIAM's growth rate forecast of 13 to 15 percent for the current fiscal year.
Sales of trucks and buses, a key economic indicator, rose 13.5 percent in January to 69,859.
Battle of the Samurais in India
If Honda is unleashing premium bikes to take on Yamaha, the latter is getting into scooters
Honda Motorcycle and Scooter India (HMSI), India’s third- biggest two-wheeler maker, showcased the CBR150R at the Delhi Auto Expo last month.
This premium motorbike, which was one of the seven new products that the Japanese company unveiled, was a top draw at the Expo. That’s not something its long time rival and fellow Japanese company Yamaha would enjoy.
The flagship 150cc YZF R15 from Yamaha costing Rs 1.07 lakh has been having a free run in India since its launch in mid-2008 and has been selling 2,500-3,000 units a month. But competition is making its intent clear – finally.
This new segment, more commonly referred to as the budget-performance sports bike segment with engine capacity at 150cc, offers the riding experience and styling of bigger capacity bikes but at a fraction of the cost.
Sources in the know say Honda Honda will price the new bike around the same level as the new R15 version 2.0, which Yamaha had launched four months ago. Honda, which has a 14 per cent share of the Indian two-wheeler market, expects to start retailing the CBR150R within the next two months.
The new R15, though expensive by Rs 9,500 compared to its earlier version, brought in additional demand for Yamaha selling on features like improved acceleration and top speed with new stylish 5-spoke split alloy wheels.
The CBR150R is a clone of the CBR series of bikes that Honda makes and sells in India and globally. The CBR series, manufactured and imported as fully built units in India, are known for their stylish appearance and sporty performance.
Honda’s new bike will plug the huge pricing gap between the Unicorn Dazzler, a 150cc commuter bike (priced at Rs 65,000) and the CBR 250 (priced at 145,000). This bike, targeted at young buyers, will address demand from the city regions, says the company.
Honda Motorcycle and Scooter India (HMSI), India’s third- biggest two-wheeler maker, showcased the CBR150R at the Delhi Auto Expo last month.
This premium motorbike, which was one of the seven new products that the Japanese company unveiled, was a top draw at the Expo. That’s not something its long time rival and fellow Japanese company Yamaha would enjoy.
The flagship 150cc YZF R15 from Yamaha costing Rs 1.07 lakh has been having a free run in India since its launch in mid-2008 and has been selling 2,500-3,000 units a month. But competition is making its intent clear – finally.
This new segment, more commonly referred to as the budget-performance sports bike segment with engine capacity at 150cc, offers the riding experience and styling of bigger capacity bikes but at a fraction of the cost.
Sources in the know say Honda Honda will price the new bike around the same level as the new R15 version 2.0, which Yamaha had launched four months ago. Honda, which has a 14 per cent share of the Indian two-wheeler market, expects to start retailing the CBR150R within the next two months.
The new R15, though expensive by Rs 9,500 compared to its earlier version, brought in additional demand for Yamaha selling on features like improved acceleration and top speed with new stylish 5-spoke split alloy wheels.
The CBR150R is a clone of the CBR series of bikes that Honda makes and sells in India and globally. The CBR series, manufactured and imported as fully built units in India, are known for their stylish appearance and sporty performance.
Honda’s new bike will plug the huge pricing gap between the Unicorn Dazzler, a 150cc commuter bike (priced at Rs 65,000) and the CBR 250 (priced at 145,000). This bike, targeted at young buyers, will address demand from the city regions, says the company.
Bajaj bike sales up 7% in January
The country's second-largest two-wheeler maker Bajaj Auto today reported 6.83% increase in its motorcycle sales in January at 2,94,439 units, the highest ever for the month.
The company had sold 2,75,622 units in the corresponding month last year, Bajaj Auto said in a statement.
The company said its exports grew 13.01% during the month at 1,16,996 units compared to 1,03,526 units in January 2011.
In the three-wheeler category, company said its sales stood at 43,436 units as against 37,961 units in the same month last year, registering a jump of 14.42%.
Total vehicle sales of the company in the last month stood at 3,37,875 units compared to 3,13,583 units in the same period a year ago, a growth of 7.75%, the statement said.
The company had sold 2,75,622 units in the corresponding month last year, Bajaj Auto said in a statement.
The company said its exports grew 13.01% during the month at 1,16,996 units compared to 1,03,526 units in January 2011.
In the three-wheeler category, company said its sales stood at 43,436 units as against 37,961 units in the same month last year, registering a jump of 14.42%.
Total vehicle sales of the company in the last month stood at 3,37,875 units compared to 3,13,583 units in the same period a year ago, a growth of 7.75%, the statement said.
Bajaj Plans Bigger Pulsar & KTM to Take on Rivals
Bajaj Auto, the county's second-largest two-wheeler maker, will launch bigger and more powerful Pulsar and KTM motorcycle models in the 200cc to 700 cc range over the next few years to take on rivals Honda, Yamaha and Suzuki and build on its leadership position in the premium motorcycle space.
Bajaj aims to position the Pulsar in the value-for-money sports bike segment and Austrian partner KTM's motorcycles at the premium end of the market.
"We share the same development process with KTM, so you can expect there will be 'a much bigger Pulsar' next year, because we think the market is at an inflection point (at the premium end) and we are in a good position to take advantage with these two brands," managing director Rajiv Bajaj said.
Bajaj said the company will come out with 350cc Pulsar next year and it is exploring even bigger motorcycles under the Pulsar brand. "There will be a 350 cc Duke next year, so you can expect something similar with the Pulsar next year. And going forward, in 2014-15 there will be even bigger KTM and even bigger Pulsar," Bajaj said.
The company is gearing up with the capacity of 1 00,000 units at its Chakan plant to cater the new range of Pulsars and KTM motorcycles. On Monday, Bajaj unveiled its Pulsar 200 NS (naked sport), which will compete against Yamaha R15 and Honda CBR 250R. The motorcycle is likely to be priced below Rs 1 lakh.
The launch followed KTM bringing in its Duke 200 last week with a price tag of Rs 1.16 lakh. Both motorcycles have been jointly developed by Bajaj and KTM. The two companies are likely to jointly bring in 350 cc and 690 cc motorcycles under the Bajaj banner over the next few years. The joint R&D for vehicle and engine development will help the company to maintain the cost and help itself maintain a 20% EBIDTA margins
And the price positioning will be similar in bigger models for Pulsar and KTM, the Indian brand at the lower end and KTM at the premium end.
The next generation Pulsar motorcycles (200cc, 350 cc and above) will co-exist with the current range of Pulsars. With bigger motorcycles expected from the Japanese competition, experts say this Bajaj-KTM twin strategy should work for the company to cater to different end of the market.
Bajaj said the new motorcycles would help the company increase market share to 30-32%, from 26% now, as the market for premium-end motorcycles is expanding fast.
Experts say that with a rise in disposable income, the number of buyers will grow, but the segment will continue to be niche as the price bracket exceeds Rs 1 lakh.
"The market is growing, yet it forms less than 1% of the overall motorcycle market in the country. The sports bike category will continue to grow in double digits and there will be takers, yet it will form only 1%-2% of the market and it will be niche category, at least in the medium term," said Mahantesh Sabarad, auto analyst with Fortune Broking.
Bajaj Auto, which has an export turnover of nearly 6,500 crore with almost 1.5 million vehicles shipped annually sees the similar strategy being played out in the global markets too.
"I think this strategy of KTM-Pulsar acting together in the sports segment is a valid strategy anywhere in the world not just in India. We will look at leveraging this in many of our overseas markets in Latin America, Africa and South East Asia," said Bajaj.
Bajaj aims to position the Pulsar in the value-for-money sports bike segment and Austrian partner KTM's motorcycles at the premium end of the market.
"We share the same development process with KTM, so you can expect there will be 'a much bigger Pulsar' next year, because we think the market is at an inflection point (at the premium end) and we are in a good position to take advantage with these two brands," managing director Rajiv Bajaj said.
Bajaj said the company will come out with 350cc Pulsar next year and it is exploring even bigger motorcycles under the Pulsar brand. "There will be a 350 cc Duke next year, so you can expect something similar with the Pulsar next year. And going forward, in 2014-15 there will be even bigger KTM and even bigger Pulsar," Bajaj said.
The company is gearing up with the capacity of 1 00,000 units at its Chakan plant to cater the new range of Pulsars and KTM motorcycles. On Monday, Bajaj unveiled its Pulsar 200 NS (naked sport), which will compete against Yamaha R15 and Honda CBR 250R. The motorcycle is likely to be priced below Rs 1 lakh.
The launch followed KTM bringing in its Duke 200 last week with a price tag of Rs 1.16 lakh. Both motorcycles have been jointly developed by Bajaj and KTM. The two companies are likely to jointly bring in 350 cc and 690 cc motorcycles under the Bajaj banner over the next few years. The joint R&D for vehicle and engine development will help the company to maintain the cost and help itself maintain a 20% EBIDTA margins
And the price positioning will be similar in bigger models for Pulsar and KTM, the Indian brand at the lower end and KTM at the premium end.
The next generation Pulsar motorcycles (200cc, 350 cc and above) will co-exist with the current range of Pulsars. With bigger motorcycles expected from the Japanese competition, experts say this Bajaj-KTM twin strategy should work for the company to cater to different end of the market.
Bajaj said the new motorcycles would help the company increase market share to 30-32%, from 26% now, as the market for premium-end motorcycles is expanding fast.
Experts say that with a rise in disposable income, the number of buyers will grow, but the segment will continue to be niche as the price bracket exceeds Rs 1 lakh.
"The market is growing, yet it forms less than 1% of the overall motorcycle market in the country. The sports bike category will continue to grow in double digits and there will be takers, yet it will form only 1%-2% of the market and it will be niche category, at least in the medium term," said Mahantesh Sabarad, auto analyst with Fortune Broking.
Bajaj Auto, which has an export turnover of nearly 6,500 crore with almost 1.5 million vehicles shipped annually sees the similar strategy being played out in the global markets too.
"I think this strategy of KTM-Pulsar acting together in the sports segment is a valid strategy anywhere in the world not just in India. We will look at leveraging this in many of our overseas markets in Latin America, Africa and South East Asia," said Bajaj.
Motown: Launches in line, demand uncertain
French auto parts supplier Valeo is launching new products and opening new factories on the hope that the present sluggishness in the Indian market will give way to a revival in the ensuing months.
However, other smaller tier-III suppliers, which supply to companies like Valeo, are waiting for big orders from car and SUV making firms to resume. With no clear indication on production patterns and new launches expected only after August, several suppliers are holding back investments.
Arvind Saxena, director (sales and marketing), Hyundai Motor India (HMIL), said, “Next six-seven months are (going to be) challenging from the industry perspective because there is nothing which can bring in a substantial change in demand. Car is bought on need but mostly bought on sentiment, so right now there is no general optimism in the market.”
Hyundai is holding back multi-crore investments scheduled for setting up a diesel engine plant, following flip-flops by the government on issues relating to the fuel’s deregulation. The Korean car brand is also launching only one new product in the market this year in addition to a face-lifted sedan.
P R Dhaamodharan, group president and MD, Valeo India, said, “Of course, when the market goes down, everybody will feel the pressures. The last few months have not been encouraging. However, we are here for a long innings. The second quarter should usher in some revival.”
The Society of Indian Automobile Manufacturers has predicted a volume growth of 13 per cent for the next financial year, but some manufacturers like Maruti believe that the realistic growth should be around 10 per cent.
With the current market slide in demand, car companies are playing safe by introducing products only towards the festive period of the year. Several new vehicles comprising sedans and SUVs are slated to come only after August this year.
Ford’s all-new global compact SUV Eco-Sport will be made available towards the end of the year, while Nissan’s new multi-seater van Evalia will come in August. Others including General Motors Chevrolet Sail and a new multi-purpose vehicle will be launched in the second half of the year.
Lowell Paddock, president and managing director, General Motors India, said, “Where we would wind up (this year) is difficult to say. There is lot of anxiety as far as the state of Indian economy is concerned. We do not know which way will inflation go.”
The industry is looking towards the next festive period for a revival in sentiments led by an expected easing of interest rates on vehicle and other consumer loans in the coming months. High interest rates and jump in fuel costs have put brakes on vehicle demand. SUV segment market leader Mahindra & Mahindra too will launch products from the SsangYong portfolio after June.
To capitalise on the lack of interest by its competitors, car market leader, Maruti Suzuki, will introduce two new models including the multi-seater Ertiga in April and a compact version of the Swift DZire sedan launched this month.
German car maker, Volkswagen, will not launch any new vehicle but the face-lifted version of the Touareg, also in April, followed by the refurbished Beetle. While the focus for car makers has been the compact segment in the past few years, no new budget small cars are expected for launch this year.
Two-wheeler manufacturers are, however, keen to get their new products rolling in order to keep the momentum in demand high. Bajaj Auto, Hero MotoCorp, Honda Motorcycle and Scooter India, TVS Motors and KTM have lined up a slew of launches spread over the next six months.
Unlike the passenger vehicle segment (including cars and SUVs), whose growth has remained flat 1.80 million units in the nine months ended December, the domestic two-wheeler market has grown by 15 per cent, recording sales of nearly 10 million units during the same period.
However, other smaller tier-III suppliers, which supply to companies like Valeo, are waiting for big orders from car and SUV making firms to resume. With no clear indication on production patterns and new launches expected only after August, several suppliers are holding back investments.
Arvind Saxena, director (sales and marketing), Hyundai Motor India (HMIL), said, “Next six-seven months are (going to be) challenging from the industry perspective because there is nothing which can bring in a substantial change in demand. Car is bought on need but mostly bought on sentiment, so right now there is no general optimism in the market.”
Hyundai is holding back multi-crore investments scheduled for setting up a diesel engine plant, following flip-flops by the government on issues relating to the fuel’s deregulation. The Korean car brand is also launching only one new product in the market this year in addition to a face-lifted sedan.
P R Dhaamodharan, group president and MD, Valeo India, said, “Of course, when the market goes down, everybody will feel the pressures. The last few months have not been encouraging. However, we are here for a long innings. The second quarter should usher in some revival.”
The Society of Indian Automobile Manufacturers has predicted a volume growth of 13 per cent for the next financial year, but some manufacturers like Maruti believe that the realistic growth should be around 10 per cent.
With the current market slide in demand, car companies are playing safe by introducing products only towards the festive period of the year. Several new vehicles comprising sedans and SUVs are slated to come only after August this year.
Ford’s all-new global compact SUV Eco-Sport will be made available towards the end of the year, while Nissan’s new multi-seater van Evalia will come in August. Others including General Motors Chevrolet Sail and a new multi-purpose vehicle will be launched in the second half of the year.
Lowell Paddock, president and managing director, General Motors India, said, “Where we would wind up (this year) is difficult to say. There is lot of anxiety as far as the state of Indian economy is concerned. We do not know which way will inflation go.”
The industry is looking towards the next festive period for a revival in sentiments led by an expected easing of interest rates on vehicle and other consumer loans in the coming months. High interest rates and jump in fuel costs have put brakes on vehicle demand. SUV segment market leader Mahindra & Mahindra too will launch products from the SsangYong portfolio after June.
To capitalise on the lack of interest by its competitors, car market leader, Maruti Suzuki, will introduce two new models including the multi-seater Ertiga in April and a compact version of the Swift DZire sedan launched this month.
German car maker, Volkswagen, will not launch any new vehicle but the face-lifted version of the Touareg, also in April, followed by the refurbished Beetle. While the focus for car makers has been the compact segment in the past few years, no new budget small cars are expected for launch this year.
Two-wheeler manufacturers are, however, keen to get their new products rolling in order to keep the momentum in demand high. Bajaj Auto, Hero MotoCorp, Honda Motorcycle and Scooter India, TVS Motors and KTM have lined up a slew of launches spread over the next six months.
Unlike the passenger vehicle segment (including cars and SUVs), whose growth has remained flat 1.80 million units in the nine months ended December, the domestic two-wheeler market has grown by 15 per cent, recording sales of nearly 10 million units during the same period.
Bajaj Auto won't rejig new Boxer despite low volume
It was meant as a replacement for the Platina but Bajaj Auto’s re-launched ‘Bharat Bike – Boxer’ has failed to live up to expectations and break Hero MotoCorp’s stranglehold on rural markets. However, the country’s second largest bike manufacturer does not plan to revisit its rural offering yet even as it continues to search for ways to challenge Splendor - the country’s single largest bike brand.
“The Boxer was launched as a power commuting bike for rural areas. We are at present selling around 3,000 units a month. This is not enough but we will wait and watch. Our Pulsar too took almost a decade to take off,” said K Srinivas, president - motorcycle business at Bajaj Auto. When Bajaj launched the Pulsar as a sports bike, the 150-cc segment was barely 3 per cent of the bike market. Today the Pulsar is a power brand that has not only helped Bajaj tower over Japanese giant Honda Motorcycle & Scooter India but has allowed it to earn the highest profit margins of any auto company in the country.
The company claims its modular capacity means it can produce any quantity of the bikes in a cost effective manner but given the expectations of this model taking on the Munjals’ volume leader, analysts are a tad disappointed. “The company is trying to figure out the gaps and getting complete feedback from dealers, supply chain officials and customers before any attempt of repositioning,” said Yaresh Kothari, auto analyst at Angel Broking. Sales of Boxer 150 cc are almost down by 7,000 units per month in India as compared to the first two months after it’s September 2011 launch. The company repositioned Boxer 150 cc as a ‘Bharat Bike’ for customers in rural India who wanted more power for the price they pay.
In an effort to boost sales, the company is at present marketing the bike in 16,000 villages. The company is showcasing bikes through demo vans and allowing customers to experience it through test rides. “A 100 cc bike for rural markets would have been easy to do as this is what we sell overseas too. But we need to differentiate this in the market and that’s why we provided a solid 150 cc bike,” said Srinivas. According to him there are at least some customers in these markets who are interested in a rugged powerful bike but the question is how to expand this base of customers.
Dealers feel that the company’s limited marketing push and lower margins relative to its other 150cc bike Pulsar, clearly tips the balance in favour of the latter. “Customers who buy the bike are thrilled with its performance and utility and the price at which it is sold. When creating a new category it is tempting to try to fix something. But customers who are using it for five to six months now are happy with its performance and not unhappy with the mileage. So we are looking at up-scaling our seeding activity for the bike in villages further,” said Srinivas. Experts however point that the 150 cc Boxer comes with a lesser mileage than its previous 100 cc avatar.
Non-urban markets which, are the primary target for the Boxer account for between 55-60 per cent of total bike sales in India, the company estimates. According to the Society of Indian Automobile Manufacturers (Siam), production of motorbikes/step-through mopeds rose 16.44 per cent in the nine months of financial year 2011-2012 to 90.4 lakh units.
“The Boxer was launched as a power commuting bike for rural areas. We are at present selling around 3,000 units a month. This is not enough but we will wait and watch. Our Pulsar too took almost a decade to take off,” said K Srinivas, president - motorcycle business at Bajaj Auto. When Bajaj launched the Pulsar as a sports bike, the 150-cc segment was barely 3 per cent of the bike market. Today the Pulsar is a power brand that has not only helped Bajaj tower over Japanese giant Honda Motorcycle & Scooter India but has allowed it to earn the highest profit margins of any auto company in the country.
The company claims its modular capacity means it can produce any quantity of the bikes in a cost effective manner but given the expectations of this model taking on the Munjals’ volume leader, analysts are a tad disappointed. “The company is trying to figure out the gaps and getting complete feedback from dealers, supply chain officials and customers before any attempt of repositioning,” said Yaresh Kothari, auto analyst at Angel Broking. Sales of Boxer 150 cc are almost down by 7,000 units per month in India as compared to the first two months after it’s September 2011 launch. The company repositioned Boxer 150 cc as a ‘Bharat Bike’ for customers in rural India who wanted more power for the price they pay.
In an effort to boost sales, the company is at present marketing the bike in 16,000 villages. The company is showcasing bikes through demo vans and allowing customers to experience it through test rides. “A 100 cc bike for rural markets would have been easy to do as this is what we sell overseas too. But we need to differentiate this in the market and that’s why we provided a solid 150 cc bike,” said Srinivas. According to him there are at least some customers in these markets who are interested in a rugged powerful bike but the question is how to expand this base of customers.
Dealers feel that the company’s limited marketing push and lower margins relative to its other 150cc bike Pulsar, clearly tips the balance in favour of the latter. “Customers who buy the bike are thrilled with its performance and utility and the price at which it is sold. When creating a new category it is tempting to try to fix something. But customers who are using it for five to six months now are happy with its performance and not unhappy with the mileage. So we are looking at up-scaling our seeding activity for the bike in villages further,” said Srinivas. Experts however point that the 150 cc Boxer comes with a lesser mileage than its previous 100 cc avatar.
Non-urban markets which, are the primary target for the Boxer account for between 55-60 per cent of total bike sales in India, the company estimates. According to the Society of Indian Automobile Manufacturers (Siam), production of motorbikes/step-through mopeds rose 16.44 per cent in the nine months of financial year 2011-2012 to 90.4 lakh units.
TVS Motors price cut to Rs 53
Following 15% profit miss in the October-December quarter, we cut TVS Motors' standalone EPS forecasts by 23%-28% over FY13-14E, driven by (1) revision to volumes due to weak franchise in bikes and structural downturn in three wheelers, and (2) lowered margins due to worsening sales mix and rising promotional spends. Consequently, lower price objective (PO) to R53 and downgrade rating to underperform from neutral. At our price objective, stock would trade at 11.2x consolidated P/E FY13E, slightly ahead of historic averages.
TVS Motors' Q3 net profit at R56.5 crore, up 1.4% was well below our and the Street estimates due to margins restricted at 6.5%compared to our estimate of over 7%.
As a result, Ebitda grew 14.6% to R115 crore (estimated at R130 crore), despite in line sales. This has been the worst quarter this year, dragging down YTD profit growth to 27%.
TVS Motors' YTD aggregate volume growth of 10% is below industry average in key segments (bikes, scooters, three wheelers). We believe that sales will remain subdued as (1) re-launch prospects of 110cc Victor bike in the commuter segment will be restricted by weak franchise, (2) scooters will see slew of competing products e.g. Hero Motocorp, Yamaha, and (3) three wheelers are set for structural downturn. Post revision, we expect volumes to register 6% CAGR over next 2 years, from earlier 9% CAGR.
We expect margins to remain subdued over forecast period, driven by (1) lower volumes, (2) adverse sales mix, due to slippage in three wheelers, and (3) sustained rise in marketing expenses to support new product initiatives. We, therefore, cut margins by ~80bps/year to 6.4%, both in FY13-14E.
Our price objective of R 53 is based on sum of stand-alone business valued at 10x FY13E P/E (earlier 10.5x), which is 30% discount to imputed multiple of peers, on lower margins and return ratios, and nil value for the Indonesian subsidiary, which is currently operating on losses. At our PO, the stock would trade at 11.2x consolidated FY13E P/E, still slightly ahead of historic averages.
TVS Motors' Q3 net profit at R56.5 crore, up 1.4% was well below our and the Street estimates due to margins restricted at 6.5%compared to our estimate of over 7%.
As a result, Ebitda grew 14.6% to R115 crore (estimated at R130 crore), despite in line sales. This has been the worst quarter this year, dragging down YTD profit growth to 27%.
TVS Motors' YTD aggregate volume growth of 10% is below industry average in key segments (bikes, scooters, three wheelers). We believe that sales will remain subdued as (1) re-launch prospects of 110cc Victor bike in the commuter segment will be restricted by weak franchise, (2) scooters will see slew of competing products e.g. Hero Motocorp, Yamaha, and (3) three wheelers are set for structural downturn. Post revision, we expect volumes to register 6% CAGR over next 2 years, from earlier 9% CAGR.
We expect margins to remain subdued over forecast period, driven by (1) lower volumes, (2) adverse sales mix, due to slippage in three wheelers, and (3) sustained rise in marketing expenses to support new product initiatives. We, therefore, cut margins by ~80bps/year to 6.4%, both in FY13-14E.
Our price objective of R 53 is based on sum of stand-alone business valued at 10x FY13E P/E (earlier 10.5x), which is 30% discount to imputed multiple of peers, on lower margins and return ratios, and nil value for the Indonesian subsidiary, which is currently operating on losses. At our PO, the stock would trade at 11.2x consolidated FY13E P/E, still slightly ahead of historic averages.
Honda launches new Dio, scooter with 15% higher mileage
Honda has launched the new ‘Dio' scooter with a larger 110cc (8 BHP) engine which claims 15 per cent higher fuel efficiency than before (55 kmpl). Priced at Rs 42,362, the new model is available from end-February. The Dio has a new front design and tail light arrangement. It will also feature tubeless tyres, wider seats and a ‘Combi Brake System' – which activates both brakes from a single press. “The increased convenience and comfortable riding position of New Dio will appeal to both style conscious young males and females,” said Mr N.K. Rattan, Vice President – Sales, Marketing & Corporate Affairs, Honda Motorcycle & Scooter India.The Dio was originally launched in 2002 with a 102cc petrol engine.
Hero is title sponsor
Hero MotoCorp Ltd. will be the title sponsor of the men's and women's Olympic hockey qualifying events to be held here from February 18 to 26.
The event, to be known as the ‘Hero FIH Road to London,' will be the first of three qualifiers for the London Games.
In the men's competition, India, Canada, France, Poland, Italy and Singapore will fight it out for a berth in the Olympics. Ukraine, Canada, South Africa, Poland, Italy and host India will be in the fray in the women's section.
The event, to be known as the ‘Hero FIH Road to London,' will be the first of three qualifiers for the London Games.
In the men's competition, India, Canada, France, Poland, Italy and Singapore will fight it out for a berth in the Olympics. Ukraine, Canada, South Africa, Poland, Italy and host India will be in the fray in the women's section.
Bajaj launches all-new Pulsar with triple spark engine
Bajaj Auto unveiled its all-new 200cc Pulsar with a four-valve, triple spark engine on Monday. The bike comes with liquid cooling and a six-speed gear box.
The Pulsar 200NS will hit the roads in April and be priced under Rs 1-lakh in a segment where its nearest rivals are Yamaha's R15 and Honda's CBR bikes with price tags of Rs 1-1.5 lakh.
Top brand
First launched in 2001, the Pulsar heralded the arrival of Bajaj Auto as a serious motorcycle manufacturer.
“It is the most profitable bike in the world and is proof of what a brand is in terms of pricing power,” Mr Rajiv Bajaj, Managing Director, said at a press conference here.
More importantly, the Pulsar is the centre of gravity of the company's strategy. This was a position earlier held by the Chetak for decades till the geared scooter market fell apart with the arrival of motorcycles. “If Pulsar gets it right, all of Bajaj Auto gets it right,” he added.
Lessons from Pulsar
The Discover, for instance, is the commuter form of the Pulsar and has done the trick in the numbers game. Likewise, the Pulsar lessons have come in handy for the recently unveiled RE60 four-wheeler and KTM bikes.
“Within the company, the accent is on making better Pulsars. I also expect this to be a big year for motorcycles at Bajaj Auto and you can expect more triple spark offerings,” Mr Bajaj said.
An all-new commuter bike (which will, in all probability, be part of the Discover family) is due to be launched by June and will also be fitted with this technology. There will also be a 350cc KTM motorcycle which means a bigger Pulsar will also follow suit.
Production
The Pulsar 200NS will be produced at the Chakan plant near Pune, which already rolls out the 135, 150 and 180cc options. The KTM bikes are also part of this ‘flexible line' which accounts for over 100,000 bikes each month.
Last week saw Bajaj Auto launch the KTM Duke 200, which will now pave the way for a new brand positioning strategy. The 30 plus Probiking showrooms, which used to house the Pulsar and Avenger bikes, will now give way to KTM Stores in mid-February.
The company's existing 600-and-odd dealerships are already being upgraded to retail the Pulsar, Discover and Boxer range. The idea is to keep KTM at the premium end while the Pulsar will be the value-for-money bike.
The Pulsar 200NS will hit the roads in April and be priced under Rs 1-lakh in a segment where its nearest rivals are Yamaha's R15 and Honda's CBR bikes with price tags of Rs 1-1.5 lakh.
Top brand
First launched in 2001, the Pulsar heralded the arrival of Bajaj Auto as a serious motorcycle manufacturer.
“It is the most profitable bike in the world and is proof of what a brand is in terms of pricing power,” Mr Rajiv Bajaj, Managing Director, said at a press conference here.
More importantly, the Pulsar is the centre of gravity of the company's strategy. This was a position earlier held by the Chetak for decades till the geared scooter market fell apart with the arrival of motorcycles. “If Pulsar gets it right, all of Bajaj Auto gets it right,” he added.
Lessons from Pulsar
The Discover, for instance, is the commuter form of the Pulsar and has done the trick in the numbers game. Likewise, the Pulsar lessons have come in handy for the recently unveiled RE60 four-wheeler and KTM bikes.
“Within the company, the accent is on making better Pulsars. I also expect this to be a big year for motorcycles at Bajaj Auto and you can expect more triple spark offerings,” Mr Bajaj said.
An all-new commuter bike (which will, in all probability, be part of the Discover family) is due to be launched by June and will also be fitted with this technology. There will also be a 350cc KTM motorcycle which means a bigger Pulsar will also follow suit.
Production
The Pulsar 200NS will be produced at the Chakan plant near Pune, which already rolls out the 135, 150 and 180cc options. The KTM bikes are also part of this ‘flexible line' which accounts for over 100,000 bikes each month.
Last week saw Bajaj Auto launch the KTM Duke 200, which will now pave the way for a new brand positioning strategy. The 30 plus Probiking showrooms, which used to house the Pulsar and Avenger bikes, will now give way to KTM Stores in mid-February.
The company's existing 600-and-odd dealerships are already being upgraded to retail the Pulsar, Discover and Boxer range. The idea is to keep KTM at the premium end while the Pulsar will be the value-for-money bike.
Who'll be the hero?
If measured by financial as well as operational performance, of late the action in the automobile market has shifted from four-wheeler to two-wheeler companies. The last quarter saw two-wheeler makers doing decent business and reporting rising sales and better earnings, although some saturation levels did show. At the same time, there is also the possibility of a new two-wheeler leader emerging in the country, what with Hero and Honda separating and Bajaj upping its ante by bringing in the legendary KTM bikes to India.
Hero MotoCorp remains the largest two-wheeler company by volumes and the fact that it launched a new petrol-electric hybrid scooter named Leap at last month’s Auto Expo in Delhi without any technological support from Honda goes to prove that the company has worked well on its R&D. As Anil Dua, senior vice-president, marketing & sales, Hero MotoCorp, puts it, “The year 2011 was very eventful for us and, in terms of overall sales, we recorded a growth of 19.2% over 2010. We also launched Impulse—our first bike under the new Hero brand name—which created a whole new segment in the Indian two-wheeler market, the on-road, off-road segment.”
The fact that Hero has been able to keep its sales in excess of half a million units per month goes on to prove that the Honda divorce hasn’t quite hit Hero. On this year’s plans, Dua says, “We will soon be introducing our second scooter, the 110cc Hero Maestro, as well as two bikes—the 125cc Ignitor and the 110cc Passion Xpro.” On network expansion, Dua says, “We remain committed to our multi-focal strategy of new launches, network expansion, rural drive and on-ground customer activation. We currently have more than 4,500 touch points across the country and we plan to take this up to 5,000 soon.”
For Honda Motorcycle and Scooter India (HMSI), it is a whole new beginning after the Japanese giant entered India with Hero in 1984. HMSI unveiled as many as seven products at the Auto Expo—New Dio, Dream Yuga, New CB Shine, CBR 150R, CBR 250R, CBR1000RR Fireblade and VT 1300CX. The company says it will stepwise introduce the products with regional/local launches. NK Rattan, vice-president, sales & marketing, HMSI, says, “Now as the ‘only’ Honda in India, we shall endeavour to become number 1 in this decade with the initial aim for number 1 spot in customer satisfaction.” It will be interesting to watch, as Honda’s uniqueness lies in its indigenous expertise in customer-oriented product development, and high quality and reliability of products.
For Bajaj Auto, the challenge has got bigger, because now apart from competition from Hero, it will also have to contest with HMSI, which will now have more bikes in its arsenal. Bikes, it must be remembered, is the only two-wheeler segment where Bajaj is present—the company made a total exit from the scooter market in 2009. Bajaj recently launched the KTM 200 Duke and unveiled the new Pulsar 200NS. The company, which is a force to reckon with in the premium bikes segment, says, “Between the Pulsar and the Duke, we intend to further strengthen our dominant position in the premium motorcycle segment.”
TVS Motor Company, which said at the Auto Expo that it will be launching four new products in fiscal 2012-13, believes that the volume segment for motorcycles is the executive segment. HS Goindi, president, marketing, TVS, says, “The new launches announced will not only help complete our motorcycle portfolio, but also help increase our market share.” On growth in the industry, he adds, “The two-wheeler industry in India is expected to grow at around 13-15%. TVS also expects to close the current. financial year in line with the growth average.”
If you would have noticed over the last couple of years, the ‘thump’ on Indian roads is sounding more often, and it looks quite good as well! Royal Enfield, makers of the Bullet—which is not just a bike but a quintessentially British 1950s biking experience—has been able to carve a niche for itself with the Classic range by attracting buyers who earlier stuck to the 150-200cc bikes. Then at the Auto Expo it launched the New Thunderbird 500. On the company’s 2012 plans, Shaji Koshy, senior vice-president, sales & marketing, Royal Enfield, says, “We have remained very clear on retaining the quintessential Royal Enfield characteristics. And, as pioneers of leisure riding in India, our bikes have always reflected the best of both worlds—uncompromised riding pleasure on the highway and uncomplicated practicality for city riding. The core to this philosophy is our mantra of ‘keep riding’ and this will reflect in our products, our communication, new ventures like accessories and even in our internal culture.” It must be added here that the company recently unveiled its biking gear, something which Royal Enfield aficionados had been looking forward to.
Harley-Davidson, the ubiquitous American highway cruising experience, says it has received a fantastic response in India and today there are more than 1,000 Harleys cruising along Indian roads. Sanjay Tripathi, director, marketing, Harley-Davidson India, says, “Harley-Davidson is not just a motorcycle company, but a culture defined on two wheels that inimitably encompasses self-expression, adventure, freedom of the open road and belonging to a global community—a family of riders. Our 360-degree marketing approach includes events such as boot camps, founders’ ride, media rides, etc, along with strategic advertising, an interactive website, etc.” This year, the company associated with the India Art Fair with an aim to bring alive the ‘Art of Customisation’, highlighting the brand’s core differentiation that ‘no two Harley-Davidsons are the same’. Tripathi says, “Given the huge response these initiatives have garnered over the last two years, and the passion and respect the brand has received from Harley enthusiasts, we look forward to welcoming more riders to experience the true Harley culture and lifestyle.”
At the Auto Expo, a competitor to Harley had arrived, from Britain, and now the high-end bike buyers have more to look forward to. Triumph Motorcycles says it is elated by the response it is getting since its launch. Ashish Joshi, managing director, Triumph Motorcycles India, says, “Although it may take a few months for all Triumph bikes to reach India, the requests from discerning consumers and individuals showing keen interest in dealerships is a promising start for us.” On Triumph’s marketing strategy, Joshi says, “The key essence of our marketing strategy will be to provide our Indian customers the same brand experience that we provide globally. We will also be making conscious efforts to providing everything from genuine parts, unrivalled after-sales services to authentic Triumph merchandise and accessories that will form the cornerstone for our brand.” The company believes that with the attractive pricing (ranging from R5.5 lakh to Rs. 22 lakh) to support its products, it is confident of attracting customers.
This year promises to be quite an exciting one for two-wheeler makers. While Hero is precisely doing what Bajaj and TVS did after they separated from Kawasaki and Suzuki, respectively, that is upping its R&D ante, HMSI is expanding its products to suit all kind of customer needs and is rapidly building capacity. Royal Enfield is attracting more youngsters into its fold and, at the other end of the segment, Harley is facing competition from Triumph, which itself is trying to carve a niche for itself. Let’s see how the year pans out
Hero MotoCorp remains the largest two-wheeler company by volumes and the fact that it launched a new petrol-electric hybrid scooter named Leap at last month’s Auto Expo in Delhi without any technological support from Honda goes to prove that the company has worked well on its R&D. As Anil Dua, senior vice-president, marketing & sales, Hero MotoCorp, puts it, “The year 2011 was very eventful for us and, in terms of overall sales, we recorded a growth of 19.2% over 2010. We also launched Impulse—our first bike under the new Hero brand name—which created a whole new segment in the Indian two-wheeler market, the on-road, off-road segment.”
The fact that Hero has been able to keep its sales in excess of half a million units per month goes on to prove that the Honda divorce hasn’t quite hit Hero. On this year’s plans, Dua says, “We will soon be introducing our second scooter, the 110cc Hero Maestro, as well as two bikes—the 125cc Ignitor and the 110cc Passion Xpro.” On network expansion, Dua says, “We remain committed to our multi-focal strategy of new launches, network expansion, rural drive and on-ground customer activation. We currently have more than 4,500 touch points across the country and we plan to take this up to 5,000 soon.”
For Honda Motorcycle and Scooter India (HMSI), it is a whole new beginning after the Japanese giant entered India with Hero in 1984. HMSI unveiled as many as seven products at the Auto Expo—New Dio, Dream Yuga, New CB Shine, CBR 150R, CBR 250R, CBR1000RR Fireblade and VT 1300CX. The company says it will stepwise introduce the products with regional/local launches. NK Rattan, vice-president, sales & marketing, HMSI, says, “Now as the ‘only’ Honda in India, we shall endeavour to become number 1 in this decade with the initial aim for number 1 spot in customer satisfaction.” It will be interesting to watch, as Honda’s uniqueness lies in its indigenous expertise in customer-oriented product development, and high quality and reliability of products.
For Bajaj Auto, the challenge has got bigger, because now apart from competition from Hero, it will also have to contest with HMSI, which will now have more bikes in its arsenal. Bikes, it must be remembered, is the only two-wheeler segment where Bajaj is present—the company made a total exit from the scooter market in 2009. Bajaj recently launched the KTM 200 Duke and unveiled the new Pulsar 200NS. The company, which is a force to reckon with in the premium bikes segment, says, “Between the Pulsar and the Duke, we intend to further strengthen our dominant position in the premium motorcycle segment.”
TVS Motor Company, which said at the Auto Expo that it will be launching four new products in fiscal 2012-13, believes that the volume segment for motorcycles is the executive segment. HS Goindi, president, marketing, TVS, says, “The new launches announced will not only help complete our motorcycle portfolio, but also help increase our market share.” On growth in the industry, he adds, “The two-wheeler industry in India is expected to grow at around 13-15%. TVS also expects to close the current. financial year in line with the growth average.”
If you would have noticed over the last couple of years, the ‘thump’ on Indian roads is sounding more often, and it looks quite good as well! Royal Enfield, makers of the Bullet—which is not just a bike but a quintessentially British 1950s biking experience—has been able to carve a niche for itself with the Classic range by attracting buyers who earlier stuck to the 150-200cc bikes. Then at the Auto Expo it launched the New Thunderbird 500. On the company’s 2012 plans, Shaji Koshy, senior vice-president, sales & marketing, Royal Enfield, says, “We have remained very clear on retaining the quintessential Royal Enfield characteristics. And, as pioneers of leisure riding in India, our bikes have always reflected the best of both worlds—uncompromised riding pleasure on the highway and uncomplicated practicality for city riding. The core to this philosophy is our mantra of ‘keep riding’ and this will reflect in our products, our communication, new ventures like accessories and even in our internal culture.” It must be added here that the company recently unveiled its biking gear, something which Royal Enfield aficionados had been looking forward to.
Harley-Davidson, the ubiquitous American highway cruising experience, says it has received a fantastic response in India and today there are more than 1,000 Harleys cruising along Indian roads. Sanjay Tripathi, director, marketing, Harley-Davidson India, says, “Harley-Davidson is not just a motorcycle company, but a culture defined on two wheels that inimitably encompasses self-expression, adventure, freedom of the open road and belonging to a global community—a family of riders. Our 360-degree marketing approach includes events such as boot camps, founders’ ride, media rides, etc, along with strategic advertising, an interactive website, etc.” This year, the company associated with the India Art Fair with an aim to bring alive the ‘Art of Customisation’, highlighting the brand’s core differentiation that ‘no two Harley-Davidsons are the same’. Tripathi says, “Given the huge response these initiatives have garnered over the last two years, and the passion and respect the brand has received from Harley enthusiasts, we look forward to welcoming more riders to experience the true Harley culture and lifestyle.”
At the Auto Expo, a competitor to Harley had arrived, from Britain, and now the high-end bike buyers have more to look forward to. Triumph Motorcycles says it is elated by the response it is getting since its launch. Ashish Joshi, managing director, Triumph Motorcycles India, says, “Although it may take a few months for all Triumph bikes to reach India, the requests from discerning consumers and individuals showing keen interest in dealerships is a promising start for us.” On Triumph’s marketing strategy, Joshi says, “The key essence of our marketing strategy will be to provide our Indian customers the same brand experience that we provide globally. We will also be making conscious efforts to providing everything from genuine parts, unrivalled after-sales services to authentic Triumph merchandise and accessories that will form the cornerstone for our brand.” The company believes that with the attractive pricing (ranging from R5.5 lakh to Rs. 22 lakh) to support its products, it is confident of attracting customers.
This year promises to be quite an exciting one for two-wheeler makers. While Hero is precisely doing what Bajaj and TVS did after they separated from Kawasaki and Suzuki, respectively, that is upping its R&D ante, HMSI is expanding its products to suit all kind of customer needs and is rapidly building capacity. Royal Enfield is attracting more youngsters into its fold and, at the other end of the segment, Harley is facing competition from Triumph, which itself is trying to carve a niche for itself. Let’s see how the year pans out
2012 brings smile to car makers
Major car makers in the country, including Maruti Suzuki, Hyundai and Tata Motors, posted an increase in sales during January, indicating buoyancy in the auto market in the new year after prolonged sluggishness.
The country's largest car-maker Maruti Suzuki India witnessed a turnaround in monthly sales after seven consecutive months of decline with a 2.42 per cent rise in domestic sales to 88,377 units last month from 86,285 units in January last year.
Rival Hyundai Motor India Ltd (HMIL) said its sales grew by 11.85 per cent in January to 33,900 units from 30,306 units in the same month last year. Tata Motors also reported a 14.75 per cent increase in domestic passenger vehicles sales to 34,669 units in January from 30,212 units in the same month last year.
“The year seems to have started on a positive note, domestic sales are showing some buoyancy. But we will have to cautiously watch how this momentum picks up in the months ahead,” HMIL director marketing and sales, Mr Arvind Saxena said.
Striking a cautious note, MSI managing executive officer (marketing and sales), Mr Mayank Pareek said: “The fundamental weakness in the market still remains. The problems of high interest rates and fuel prices persist and there is also a huge disparity in the demand for petrol and diesel vehicles.”
As per Society of Indian Automobile Manufacturers data, domestic passenger sales grew by 4.24 per cent in 2011 to 19,46,373 units from 18,67,246 units in 2010.
Other companies, such as Toyota Kirloskar Motor (TKM) and Mahindra & Mahindra (M&M), also reported good growth during January this year.
M&M posted a 19.56 per cent rise in domestic sales to 41,369 units during the month from 34,601 units in the year-ago period.
TKM reported an 89.34 per cent increase in sales to 17,395 units in January, driven by robust demand for its latest 'Etios' and 'Liva' models.
“It's been a good start to the year with a robust growth. We are happy with the response to the Etios series, the new Innova and the new Fortuner,” TKM deputy managing director (marketing), Mr Sandeep Singh said.
Ford India, on the other hand, reported a 2.99 per cent decline in total sales to 10,789 units during January.
Similarly, General Motors India posted a 17.46 per cent decline in sales to 8,241 units for January, as against 9,984 units in the same month last year.
In the two-wheeler segment, market leader Hero MotoCorp today reported its highest-ever sales of 5,20,272 units for January, a 11.52 per cent jump vis-a-vis the same month last year.
Chennai-based TVS Motor Co said its domestic two-wheeler sales registered a growth of 7.58 per cent to 1,53,014 units from 1,42,227 units last year.
In addition, Honda Motorcycle & Scooter India today reported a 46.66 per cent growth in total sales to 1,89,353 units for January.
Furthermore, India Yamaha Motor reported domestic sales of 26,300 units during the month, as against 21,974 units in the same month last year, translating into a 19.69 per cent increase.
The country's largest car-maker Maruti Suzuki India witnessed a turnaround in monthly sales after seven consecutive months of decline with a 2.42 per cent rise in domestic sales to 88,377 units last month from 86,285 units in January last year.
Rival Hyundai Motor India Ltd (HMIL) said its sales grew by 11.85 per cent in January to 33,900 units from 30,306 units in the same month last year. Tata Motors also reported a 14.75 per cent increase in domestic passenger vehicles sales to 34,669 units in January from 30,212 units in the same month last year.
“The year seems to have started on a positive note, domestic sales are showing some buoyancy. But we will have to cautiously watch how this momentum picks up in the months ahead,” HMIL director marketing and sales, Mr Arvind Saxena said.
Striking a cautious note, MSI managing executive officer (marketing and sales), Mr Mayank Pareek said: “The fundamental weakness in the market still remains. The problems of high interest rates and fuel prices persist and there is also a huge disparity in the demand for petrol and diesel vehicles.”
As per Society of Indian Automobile Manufacturers data, domestic passenger sales grew by 4.24 per cent in 2011 to 19,46,373 units from 18,67,246 units in 2010.
Other companies, such as Toyota Kirloskar Motor (TKM) and Mahindra & Mahindra (M&M), also reported good growth during January this year.
M&M posted a 19.56 per cent rise in domestic sales to 41,369 units during the month from 34,601 units in the year-ago period.
TKM reported an 89.34 per cent increase in sales to 17,395 units in January, driven by robust demand for its latest 'Etios' and 'Liva' models.
“It's been a good start to the year with a robust growth. We are happy with the response to the Etios series, the new Innova and the new Fortuner,” TKM deputy managing director (marketing), Mr Sandeep Singh said.
Ford India, on the other hand, reported a 2.99 per cent decline in total sales to 10,789 units during January.
Similarly, General Motors India posted a 17.46 per cent decline in sales to 8,241 units for January, as against 9,984 units in the same month last year.
In the two-wheeler segment, market leader Hero MotoCorp today reported its highest-ever sales of 5,20,272 units for January, a 11.52 per cent jump vis-a-vis the same month last year.
Chennai-based TVS Motor Co said its domestic two-wheeler sales registered a growth of 7.58 per cent to 1,53,014 units from 1,42,227 units last year.
In addition, Honda Motorcycle & Scooter India today reported a 46.66 per cent growth in total sales to 1,89,353 units for January.
Furthermore, India Yamaha Motor reported domestic sales of 26,300 units during the month, as against 21,974 units in the same month last year, translating into a 19.69 per cent increase.
TVS Q3 net profit rises 1.4% at Rs.57 cr.
Two-wheeler major TVS Motor Company today reported 1.40 per cent rise in standalone net profit for the quarter ended December 31, 2011, at Rs 56.53 crore.
The company had posted a net profit of Rs 55.75 crore in the corresponding period last financial year, TVS Motor Company said in a filing to the BSE.
The total income during the third quarter also increased by 7.02 per cent to Rs 1,762.22 crore from Rs 1,646.65 crore in the year-ago period, it added.
During the quarter, the company's total vehicle sales rose marginally to 5.19 lakh units from 5.18 lakh units in the same period previous year.
The company saw its scooter sales climbing by 11.29 per cent to 1.38 lakh units, while the same for motorcycle segment declined by 8.53 per cent to 1.93 lakh units, the filing said.
The three-wheeler sales dipped by 11.71 per cent to 8,899 units, it added.
However, two-wheeler exports during the hree-month period went up by 23.83 per cent to 63,700 units.
Besides, the company's Indonesian operations recorded sales of 4,033 two-wheelers, up 6.13 per cent.
Reacting to the results, shares of the company were trading 0.98 per cent up at Rs 51.40 apiece on the BSE during afternoon trade.
The company had posted a net profit of Rs 55.75 crore in the corresponding period last financial year, TVS Motor Company said in a filing to the BSE.
The total income during the third quarter also increased by 7.02 per cent to Rs 1,762.22 crore from Rs 1,646.65 crore in the year-ago period, it added.
During the quarter, the company's total vehicle sales rose marginally to 5.19 lakh units from 5.18 lakh units in the same period previous year.
The company saw its scooter sales climbing by 11.29 per cent to 1.38 lakh units, while the same for motorcycle segment declined by 8.53 per cent to 1.93 lakh units, the filing said.
The three-wheeler sales dipped by 11.71 per cent to 8,899 units, it added.
However, two-wheeler exports during the hree-month period went up by 23.83 per cent to 63,700 units.
Besides, the company's Indonesian operations recorded sales of 4,033 two-wheelers, up 6.13 per cent.
Reacting to the results, shares of the company were trading 0.98 per cent up at Rs 51.40 apiece on the BSE during afternoon trade.