Bajaj Readying for Ride on Hero’s Turf…

Blueprinting a 100 cc entry-level bike to take on best-selling Splendor and Passion

Bajaj Auto is close to launching a third 100 cc bike — in addition to the Discover and Platina — to take on Hero MotoCorp's bread and butter products, the Splendor and the Passion, as well as Honda's new model at the entry level, the 110 cc Dream

Yuga. Codenamed D-104, the bike is slated for launch in October-November and is expected to be aggressively priced at around. 40,000, a tad lower than its 100 cc and 110 cc rivals.

People close to the development say the new product’s unique selling proposition will be latest technology at an affordable price. They add that the soon-to-be-launched model will have features that are not usually found in the value segment, like perhaps an electric start, a digital instrument cluster, front and rear disc brakes and LED lights. Bajaj Auto will also do away with steel and instead using fibre and plastic to make the two-wheeler lighter, and thereby more fuel-efficient and costcompetitive.

The value segment – which some manufacturers call the ‘commuter premium’ segment – has always been Bajaj Auto’s

bugbear. It has been unable to make inroads into this turf on which Hero MotoCorp accounts for three out of every four bikes sold. Bajaj has in the past tried to crack this market with models like the Caliber and the Wind but had little success. Bajaj Auto managing director & CEO Rajiv Bajaj was unavailable for comment.

In engines with capacity of 110 cc and less, Bajaj Auto with the Boxer, CT, Platina and Discover had sales of 310,723 units in the April to June 2012 period. Hero MotoCorp with the Splendor, Passion, CD Dawn and CD Deluxe sold over four times that number in the same period. It’s this inability of the Pune-based motorcycle maker to make a dent in the entry-level segment that explains why Hero had an overall 45.33% market share in two-wheelers, and Bajaj 17.57% (in the April-June 2012 quarter).

“Currently the ratio of sales in the mass market is 5:1 in favour of the market leader. Launching a mass market product is a good move to get more volumes, although it does not add incrementally to margins,” says Mahantesh Sabarad, senior vice president of equity research at Fortune Financial Services.
What the new bike will be christened is not known. Those aware of the plans say the company is contemplating three options.

The least likely is to opt for a bottom-up strategy and launch a deluxe version of the Platina. The second option would be to introduce a new brand with differentiated features. But a more likely alternative would be to go top-down, which means extending either the Pulsar or creating having another Discover in the 100 cc segment. But taking the Pulsar, which has a sporty and macho image, down to the value-segment could dilute its proposition, said an analyst on the condition of anonymity who reckons a Discover variant may be on the cards.

Bajaj Auto is a leader in the sports segment with the Pulsar (in the above . 60,000 price range), and in the . 50,000-60,000 bandwith the Discover. But it hasn’t been able to funnel those gains towards the largest portion of the pie. Rajiv Bajaj may be hoping that the new 100 cc model will change the game.

Suzuki Motorcycle ties up with IndusInd Bank for retail finance

 Suzuki Motorcycle India Pvt Ltd (SMIPL) today said it has tied up with IndusInd Bank to offer retail financing facility to its customers across the country.

"Suzuki Motorcycle India entered into a preferred tie-up with IndusInd Bank to extend retail finance to Suzuki two-wheeler customers across all 250 SMIPL dealerships," the company said in a statement.

The preferred tie up will provide Suzuki customers an easy retail finance option.

The venture will also enable SMIPL to leverage the reach, expertise and support of IndusInd Bank in order to finance a larger set of customers, it added.

Commenting on the association, SMIPL National Head (Sales Planning and Dealer Development) Rakesh Kumar said: "Suzuki two-wheelers is delighted to be associated with IndusInd Bank. This tie-up gives us an opportunity to serve our customers better by providing easy retail finance for SMIPL products."

Vespa rides on nostalgia in India comeback

Whenever V.K. Bhardwaj, a retired army officer, rides his new Vespa scooter, a rush of adrenaline takes him back to his youth.

New Delhi-based Bhardwaj, 67, who bought a Vespa LX125 in May, said he “started his life” with it and the scooter has been his fantasy. He first bought one in 1962 and still has its number plate clearly etched in his memory.

When Piaggio Vehicles Pvt. Ltd announced last year that it plans to reintroduce the iconic two-wheelers in India, Bhardwaj was among the first to book one.

More than 40 years ago, Piaggio licensed the production of Vespa scooters to Bajaj Auto Ltd. The joint venture ended in 1971. The company formed a partnership with LML Ltd in 1983 to make and sell scooters in India. It exited the venture in 1999 when LML acquired Piaggio’s stake.

In its new avatar, the local unit of the Italian auto maker has positioned the scooter as a premium, lifestyle product aimed at women, college students and the upwardly mobile. That perception went through a sea change in just two months. “Besides the young and trendy, surprisingly, there is a renewed rush of booking and inquiries from senior citizens and people in their early 50s coming to our showrooms to ride their favourite scooter that was an integral part of their lives in younger days,” said Ravi Chopra, chairman and managing director of Piaggio Vehicles Pvt. Ltd, India.

Even octogenarians are taking a Vespa ride.

“We have an 80-year-old customer who bought a yellow-coloured Vespa with a matching yellow coloured helmet,” said Vivek Bengani, director at Delhi-Based Bhawani Motors, a Vespa dealer. “He is truly young at heart.”

Senior citizens comprise a category that Piaggio Vehicles India had almost discounted when it launched Vespa in April. There are more than 5,200 Vespas on Indian roads, according to Chopra.

Priced at Rs.66,661 (ex-showroom, Pune), the Vespa is dearer by at least Rs.20,000 compared with rival automatic scooter brands available in the market. But Vespa’s premium pricing does not appear to deter buyers. Shrestha Malhotra, 21, a Mumbai-based aircraft pilot, bought the scooter because of its head-turning effect. “I have been stopped a zillion times by curious onlookers to enquire about the scooter. Their interest vanishes when they hear that the on-road price for it in Mumbai is Rs.75,000,” he chortles.

While the niche positioning seems to be working for now, the company may face hurdles in India’s price-sensitive market, experts say.

“They are creating an imagery and building romance around the brand to attract the target audience,” said Habeeb Nizamudin, chief growth officer at media agency, Lodestar Universal. Though the scooter market is crowded, there is an opportunity gap with no firm having used this price and brand positioning, he said.

However, he’s not sure if it’s a sustainable strategy.

“This kind of pricing is difficult to sustain,” said an executive from a market research firm, who spoke on condition that neither he nor his firm be named. According to him, in any product category there is a group of novelty seekers who will buy anything new. The actual test begins once the model is a little old.

“Considering that the pricing is way off the mark, it’s difficult for Piaggio to make a mark in the competitive scooter market, which has been expanding at 20% per annum,” he said. It’s not clear whether the auto maker wants to be seen as a niche player or mass one. “It does not fit in either.”

But buyers of Vespa have a different take.

Malhotra, who is impressed by the retro Italian design, said unlike a Honda Activa, the Vespa will always be an exclusive brand in India. If it’s the cute retro look and the vintage badging that attracts those in their 20s, it’s the sense of nostalgia that rekindles the desire to own the Vespa once again for those past their prime.

Meanwhile, Piaggio, which sells the scooter through 50 Vespa stores, plans to add 30 more by September and step up its presence in smaller cities, said Piaggio’s Chopra.

The company produces the scooters at its facility in Baramati, Maharashtra, which can produce 150,000 units a year. Plans are afoot to double capacity in a year’s time.

Piaggio has invested €35 million (around Rs.243 crore) in the facility and plans to put in an additional €20 million to augment capacity.

TVS Motor Q1 net dips 13%

Two-wheeler major TVS Motor Company saw its net profit drop by 13.5% to Rs 51 crore in the first quarter, down from Rs 59 crore in the year-ago period.

Compared to the quarter ended March 2012, profit after tax is down nearly 11%. TVS clocked Rs 57.23 crore in Q4 of last fiscal.

Profits are lower due to "significant increase in brand investments across key brands including TVS Wego, TVS StaR City and TVS Sport along with the recently introduced Apache RTR and Scooty Pep," the company said in a statement on Friday.

The company's revenue, however, increased 4.24% from Rs 1,746 crore last Q1 to Rs 1,820 crore for the quarter ended June 2012. Profit before tax was down 15% at Rs 66 crore against Rs 78 crore clocked last fiscal.

Analysts had expected TVS' net profits to shrink much more. So, the stock gained in the stock market. Auto analysts said part of the reason why the street expected worse from TVS was because of its Indonesian venture which has not been doing too well. PT TVS Motor Company Indonesia saw two wheeler sales drop 14% this quarter to 6,041 units down from 7,035 units sold last Q1.

Overall domestic sales were also flat given the general sluggishness that has crept into the two-wheeler industry. TVS saw its overall sales remain flat for the quarter at 5.47 lakh units and nearly all the segments recorded various levels of degrowth.

Motorcycles clocked sales of 2.06 lakh units, down 8% compared to the 2.24 lakh units sold last Q1. Scooter sales were flat at 1.20 lakh units compared to 1.19 lakh units last year. Two wheeler exports too saw a nearly 22% dip - down to 0.61 lakh units in the current quarter against 0.78 lakh units last Q1.

Yamaha to Wear Made-in-India Tag

Yamaha to Wear Made-in-India Tag

India Yamaha Motor to export 300 R15 bikes to Japan

Twenty seven years after setting up a manufacturing base in India, Yamaha Motor Company’s Indian subsidiary will export sports bikes to Japan, in what is a first in the history of Indian two-wheeler industry.

ET learns that India Yamaha Motor, the subsidiary of the Japanese two-wheeler company, will be exporting its first shipment of 300 deluxe motorcycles of R15, a 150-cc sports bike manufactured at its plant in Surajpur. The idea is to test the product in the Japanese market, and if the response is good, the company may even begin the exports of another deluxe motorcycle, FZ, to its home market.

Confirming the development, Hiroyaki Suzuki, MD, India Yamaha Motor, told ET, “The motorcycles manufactured in India meet the advanced specification of developed markets and they are produced at a lower cost. We are sending shipments of the R15 to Japan, to test-market it in the Japanese market and, if the response is good, we may explore more products to export to Japan and other advanced markets.” “The Japanese market is a market for big bikes and racing motorcycles and, within that, the 150-cc segment is emerging. Our R15 fits the image; not only is it easy to race and manoeuvre, but it could be an ideal choice for entrylevel racing,” added Suzuki.

Annually, about 4,00,000 units of two wheelers are sold in Japan, with a large part of the market being dominated by the 50-cc scooter market and the balance making up for big bikes of 250 cc, 400 cc, 600 cc and above. R15 commands a price tag of Rs 1.15 lakh on Indian roads, but in Japan, it will sell at 3.42 lakh yen or Rs 2.45 lakh.

The Indian MD explained that once Yamaha’s sales team in Japan is able to ascertain the demand for the products, the Japanese team will give the Indian team an indication of the demand for ‘made in India’ bikes for export to Japan. “If the response is good, our next target would be Europe,” says Suzuki. Exports of two wheelers from India is nothing new. Bajaj Auto and TVS Motors export two wheelers to markets in Africa, Latin America and the Asean countries, but Yamaha’s move to reach out to the developed markets from India is something new.

Hero's Rajasthan R&D centre to be largest such

Hero MotoCorp Ltd, the biggest two-wheeler maker in the country, on Wednesday announced that it is going to come up with an integrated state-of-the-art research and development (R&D) center in Rajasthan.

The R&D facility would cover more than 250 acres at Kukas in Jaipur and it is going to be the biggest two-wheeler R&D facility in India, said Hero MotoCorp via a statement. In the meantime, Hero MotoCorp Zonal-Head (South) A Srinivasulu rolled-out the firm’s new product in Chennai, the 125cc motorcycle ‘Ignitor’.

After breaking away from its Japanese partner Honda Motor Co Ltd, this is the third two wheeler model launched by the Hero MotoCorp that is priced between Rs 56,996 and Rs 59,031 (ex-showroom Chennai) for the top-end version, said Srinivasulu.

The company introduced the 150cc motorcycle Impulse and scooter Maestro under the ‘Hero’ brand in 2012. According to Srinivasulu, the firm sells around 40,000 units in Tamil Nadu. He is also expecting the new offering to enhance sales of Ignitor under the 125cc segment.

The new motorcycle comes fitted with an ATFT engine and produces a peak power of 11PS at 8,000rpm. It is also equipped with features such as digital-analog combo meter console, front cowl and adjusted rear shock absorbers. It will have pearl white, sports red, vibrant blue, and panther black metallic color options.

Deepika Padukone to endorse Yamaha scooters

After TVS and Hero signing up Anushka Sharma and Priyanka Chopra as brand ambassadors respectively for their gearless scooters, Yamaha has signed up Deepika Padukone as the brand ambassador for  its new gearless scooter range. The sensuous diva will make her debut appearance in the advertisements for the Yamaha Ray. During the 2012 Delhi Auto Expo, Yamaha heralded the Ray as female specific.

“We are very pleased with our alliance with Deepika Padukone to endorse our scooter ‘Ray’ which just like Deepika signifies cool and beauty. Being young, fit, sporty and stylish, Deepika has all the elements that our customers will subscribe to when they buy our scooters. The youth adore her, respect her and follow her because she signifies an inherent sense of style that easily blends in with that of brand Yamaha. We look forward to have a longstanding and fruitful association with her,” said Hiroyuki Suzuki, CEO and MD, India Yamaha Motor.

The Yamaha Ray will be launched around Diwali this year and according to the company, is targeted at customers below 24 years of age. Currently Yamaha sells 13 bikes, namely the Crux, YBR 110, YBR 125, SS125, SZ-X, SZ-R, FZ16, FZ-S, Fazer, YZF-R15 and three superbikes, the FZ1, VMAX and the YZF R1

Rural India business Growth bike is TVS Max 4R

India’s love affair with two-wheelers

Over the years, two-wheelers have grown to become the pulse of rural India, serving the masses in numerous ways. In the eighties and nineties, scooters were the most cost effective and faithful carriers across the length and breadth of the country. During the past decade or so, more comfortable, efficient and modern motorcycles and scooters have replaced these ageing 2-stroke machines.

Today, most farmers and small town traders rely heavily on their motorcycles - often altered with crude aftermarket fitments to bear load - to carry out their day-to-day personal and business activities. City dwellers of all ages also depend on motorcycles and new age scooters to meet their daily transport needs, often making their own minor changes to make their ride more powerful or comfortable.

There’s no doubting that motorcycles are the closest companions of lakhs of Indians and the country’s two-wheeler market is the second-biggest in the world even though only one in 25 Indians are on two wheels. It is not surprising that many of the world’s leading two-wheeler brands have established manufacturing or marketing bases here while others are looking at entering the market through tie-ups with experienced local firms.

Meeting the need of the hour

Every manufacturer has tried to bring out products with specific features for a specific segment that they are targeting. While there are many options for the urban and semi-urban Indian, it is the rural areas that have been left wanting for choice, especially when  it comes to an integral part of their day to day business, a motorcycle. Noticing that until fairly recently, most consumers from this segment have had no other option but to procure regular commuter motorcycles and modify them accordingly, Tamilnadu based TVS Motor Company took it upon itself to do something for this category of people. With the imminent need of a sturdy, durable motorcycle that could easily carry heavy loads, the company brought out a model based on its popular Max platform. One key objective of launching this motorcycle was to provide a safer mode of travel for these riders, who are very often India's lifeline.

Carrying loads and lives with ease

One feature of the 109.7 cc Max4R, which is easily visible to the naked eye, is the presence of four instead of two rear shock absorbers.  These help the motorcycle carry heavy weights easily. It must be mentioned here that Max4R is currently the only motorcycle in the country, which has a certified payload of 200 kgs. The company also added other features that address the safety aspect of the rider like bigger brakes, wider tyres, wheel and indicator guards to protect the bike and goods, and specially reinforced spokes that are so designed as to withstand with heavy loads and not break under pressure. The bike's removable, lockable pillion seat makes space for a flat, luggage platform. Interestingly, the Max4R is currently the only model in its class that comes with the option of a mobile charger, since many rural areas often go without electricity for long periods. On the fuel economy front, a fully loaded bike delivers a mileage of around 60 kilometers to a litre of petrol.

This novel  motorcycle promises to make life easier and a lot more convenient for thousands of Indians who look at their motorcycle as something more than just a vehicle to move from one place to another but rather as a partner in business.

A stable ride.

Results surprise the Street; we continue to prefer Bajaj within the auto sector: Bajaj (target price: R1,750) remains our top pick in the Indian auto sector. The first quarter of FY13 results beat consensus and were broadly in line with our forecasts. The decline in Ebitda (earnings before interest, taxes, depreciation, and amortisation) margins (-180bps q-o-q to 17.9%) was largely on expected lines and management commentary indicated a bottoming of market share and profitability. While industry volume trends have softened, we believe Bajaj's revenue mix will likely improve in Q2FY13 as exports stabilise and new models ramp up volumes. The stock currently trades at 14x FY13e (estimates) EPS (earnings per share)– a 16% discount to Hero. We maintain our Buy rating.

Management commentary suggests inventory build-up for competition: Bajaj indicated that its retail motorcycle market share is stable. This is contrary to the market share data based on wholesale sales implying an inventory buildup by Hero. Domestic motorcycle volumes (wholesale) grew 7% in Q1FY13 compared to -1% for Bajaj and 7% for Hero. On exports, Bajaj lost 45k (2W+3W) volumes due to import barriers in Sri Lanka and disruptions in Egypt. The company expects volumes to normalise by end-Q2FY13. Our forecasts imply 8.5% growth for Bajaj for the remainder of FY13e.

We expect Bajaj to maintain the margin gap with Hero (Q1FY13 result on July 19): We believe Bajaj is likely to continue surprising on margins even though volume momentum may lag peers. Bajaj has maintained a 700bps Ebit (earnings before interest and taxes), margin gap with Hero over the last two years and we expect this to sustain in FY13e. We forecast Hero’s Ebit margins to decline 30bps to 10.4% —680bps lower than Bajaj (17.2%). However, we believe Bajaj’s better margin performance is not reflected in current valuations (P/E of 14x FY13e vs. 16.5x for Hero) and in the relative underperformance (7% vs. Hero over three months).

Key risks: continued slowdown in export volumes and a price war in the domestic market. Bajaj has underperformed Hero by 13% YTD (year-to-date) and 7% over the last three months and is currently trading at a 16% discount. We also note that the market has ignored Bajaj’s higher profit growth trajectory over the last three years. While Bajaj’s quarterly profit run-rate has doubled over the last three years, Hero’s profits have increased by only 20%.

2 wheeler cos soup up for the rough road

Two-wheeler manufacturers are lining up new models and focusing on segments they are not strong in to beat slowdown that has crimped motorcycle segment growth to single digit in the first quarter.

Bajaj Auto, which saw motorcycle sales fall 1% in the last fiscal, sees volumes reviving in coming quarters with a full-fledged launch of its new products – Pulsar 200 NS and Discover 125 ST— this fiscal. Currently, the new vehicle in the Pulsar family is launched in Maharashtra region. The country’s second-largest bikemaker is also ramping up capacity to meet the growing demand and plans to launch a bike in the commuter segment (125cc and less category) this fiscal.

Bajaj Auto, which dominates the premium bike segment with a 46% market share, seeks to boost share in the commuter segment as growth in the premium bikes category remains flat. The commuter segment is growing by 22%.

“With these new launches (Pulsar 200 NS and Discover 125 ST), we are expecting an additional volume of 15,000 units a month and from August we are expecting 35,000 plus units. These will be high-margin, costlier products, which will help boost profitability,” said S Ravikumar, senior vice-president (business development), Bajaj Auto.

“Q1 has been the worst-ever quarter for the company and we are expecting things to improve with the new products,” he said.

Hero MotoCorp, the biggest two-wheeler manufacturer, on the other hand, is looking at increasing its market share in premium bikes as it plans to launch refreshes of its entire range of such bikes. The company has Hunk, CBZ and Karizma bikes in the premium category.

“We did not focus on ad spends in the first quarter. With new launches, we will have model-focused ads. With new products, we are expecting some increase in share from urban customers,” said Anil Dua, senior vice-president (marketing & sales), Hero MotoCorp, on an earnings call.

However, rising competition and weak demand remain major headwinds.

Companies such as Honda Motorcycle and Scooter India (HMSI) and Mahindra 2 wheelers have already announced major plans for the Indian market.

While the entire two-wheeler industry, backed by the scooter segment, registered a growth of 10.51% during April-June 2012, the motorcycle segment grew only 7%, according to the Society of Indian Automobile Manufacturers data.

Though the overall two-wheeler industry is estimated to grow at 10% this fiscal, industry players feel the growth may be limited to 7-8%.

Abhishek Banerjee, senior analyst with Asian Market Securities, said, “In the current market scenario, even if the industry grows at mid-level single-digit growth, there is a scope for a decent volume growth. The second half of the year should be good for the industry with new launches and festive season.”

Fantastic Four.

Four exciting but affordable motorcycles are on sale right now. Ruman Devmane reveals which one’s for you

BAJAJ PULSAR 200NS

WHAT’S IT ABOUT?

The answer is briefly in the name. The ‘200’ denotes the engine displacement (199.5cc, actually) of the triple-spark-plug equipped single-cylinder engine. The other half of the name, ‘NS’, stands simply for ‘Naked Sports’ — a reference to the bike's styling and performance oriented nature.


HOW IS IT TO RIDE?

The all-new pressed steel perimeter frame on the 200NS is a Bajaj first, and is what you also see on motorcycles like the Yamaha R15 and the Honda CBR 150/250R (apart from bigger, more powerful superbikes). It is this frame that makes the Pulsar 200NS about as friendly as India's handling benchmark — the first-generation Yamaha R15. It’s an effortless handler, the brakes are sharp (although the tyres aren’t very communicative) and all said and done, the 200NS allows you to push your riding limits and never falls short on poise. That’s not all. The 200NS’ handling is well-complemented by its performance. Bajaj has retained a great degree of Pulsar-ness in terms of engine feel despite the bottom half of the engine coming from the KTM Duke 200. The 199.5cc engine is unstressed, free-revving and takes to elevated speeds comfortably. The six-speed gearbox (another Bajaj first) is well spaced out and the bike is as comfortable doing triple-digit speeds as it is cruising at 60 kmph in top gear. A top speed of 136 kmph and a 0-100 kmph timing of 11.9 secs is good, right?

WHAT’S NOT TO LIKE?

Once the novelty of the new components (the chassis, engine) wears off, you are essentially left with a motorcycle that is, in character, a Pulsar. Maybe a little inspiration from the KTM Duke would have added to the bike’s personality. Works for you if you’re a Pulsar fan, doesn’t if you’re not.

WHO SHOULD BUY ONE?

If you are new to the 20+ bhp segment and want fantastic value, the Pulsar is the one you're looking for. It scores high on looks, performance as well as economy (how does 45 kmpl under hard riding sound?). The Pulsar 200NS is, in short, a lot of motorcycle for a lot less money.

QUICK SPECS

Displacement: 199.5cc, single-cylinder
Power: 23.17 bhp@9500 rpm
Torque: 1.86 kg@8000 rpm
Transmission: 6-speed
Price: Rs 87,514 (ex-showroom, Mumbai)
KTM DUKE 200

WHAT’S IT ABOUT?

It's a scaled-down version of one of the most enjoyable motorcycles in the world — the KTM 690 Duke. KTMs are tough — if slightly unrefined — powerful, blue-collared motorcycles that are meant to be ridden hard, and the Duke 200 is exactly that. It’s the Pulsar 200NS’ evil twin.

HOW IS IT TO RIDE?

It’s quick, it will wheelie all day and give you thrills you can only ever expect from a two-stroke motorcycle. The Duke 200, at 136 kg (kerb weight), is far lighter than any of its contemporaries and with its 200cc, 25.4 bhp motor, is also the wildest of them all. It is ultra short-geared, which means you end up in top (sixth) gear incredibly quickly, and before you know it, you're on the wrong side of 100 kmph. The Duke’s power is concentrated in the early bits of the powerband and while you can still cruise at high-speeds, that’s not where the Duke is truly in its element. The wide, upright handlebar offers good leverage and is good for both intense street riding as well as comfortable long-distance runs. Handling-wise, the Duke will cater to the seasoned rider’s wants with precision. It’s light, flickable and falls into corners with a sense of immediacy that may intimidate the novice. Be warned, this is a seriously fast motorcycle and the sharp brakes and telepathic chassis do demand a level of experience before you can get anywhere close to its limits.

WHAT’S NOT TO LIKE?

The suspension, despite being adjustable, is too stiff for anything except exceptionally flat road surfaces — something that’s rare in the country. Apart from that, the Duke's engine is fundamentally different in behaviour from Japanese motorcycles. You can either like it, or hate it.

WHO SHOULD BUY ONE?

If you are serious about your riding techniques and have been in the 20 bhp segment for too long, the KTM Duke 200 is what you should be looking at. It’s quicker than everything else in its class, and the trellis frame, upside-down forks and universally appealing looks are absolutely worth the value-for-money price tag.

QUICK SPECS

Displacement: 200cc, single-cylinder
Power: 25.48 bhp@10,000 rpm
Torque: 1.99 kg@8000 rpm
Transmission: 6-speed
Price: Rs 1.18 lakh (ex-showroom, Mumbai)

YAMAHA R15 V2.0

WHAT'S IT ABOUT?

The second generation of Yamaha’s biggest success story in the country (second only to the FZ16) is the R15 V2.0. Year 2011 saw the R15 get some important updates — a redesigned tail section (the first-gen bike got a lot of flak for this) and a lengthened wheelbase for added stability.

HOW IS IT TO RIDE?

The R15 is the most track-focussed bike in its class. Horsepower notwithstanding, it has all the elements of an authentic sports bike — a sophisticated twin-spar frame, soft compound tyres, a disc brake at either end and a motor that, though short on punch (relatively speaking), is very tractable. The R15 is the ideal bike for you if you want a contemporary motorcycle without being intimidated by the power on offer. It’s fast, flickable and sharp, but none of this comes across as too volatile (like on the Duke, for example) at any given point. It is, undoubtedly, the best handling bike in the country and while the first-gen R15 was a neutral handler (very friendly, easy to master), the V2.0 requires some amount of effort if you really want to extract the maximum out of it. Also, while the R15 was never designed to be a commuter, it takes to cruising in sixth gear comfortably and while at it, will return excellent mileage figures too.

WHAT’S NOT TO LIKE?

The riding position is a bit too extreme for everyday usage. On a racetrack, the riding position makes absolute sense but in urban environs, it's unlikely that you will be comfortable on it for longer than an hour. Also, the pillion seat is set a bit too high up, and your pillion will certainly not be very pleased.

WHO SHOULD BUY ONE?

A full-faired motorcycle has always been aspirational for motorcycle lovers and if that is what you want, along with absolute poser value and, of course, value for money, go for the R15 V2.0. It's one of the most enjoyable bikes for a quick weekend ride to the hills, or a day out at the race track and it's still got enough thrills to keep you entertained in the city. Can't go wrong with this one.

QUICK SPECS

Displacement: 149.8cc, single-cylinder
Power: 17 bhp@8250 rpm
Torque: 1.52 kg@6250 rpm
Transmission: 6-speed
Price: Rs 1.12 lakh (ex-showroom, Mumbai)

HONDA CBR 150R

WHAT'S IT ABOUT?

The Honda CBR 150R is, essentially, a scaled-down version of the CBR 250R. This means it has all the components of a thorough sports bike, without being a scare. Like the 250R, the 150R, too, isn’t a size-zero motorcycle. It’s comfortable, contemporary and caters to a wider audience as opposed to the R15 V2.0 or the Duke.

HOW IS IT TO RIDE?

It’s up to you to decide whether this is a good thing or not, but the CBR 150R feels more like a grown-up Stunner than a CBR 250R gone younger. It's refined, but lacks the focus that the 250R or, for that matter, the other bikes on this page have. The 150R’s 149.4cc mill produces 17.6 bhp at 10,500 rpm, which propels it from 0-100 kmph in 15.08 seconds (the R15 does it in 15.1) and yet, it comes across as not very involving. This is good, in a way, given that a majority of performance motorcycle buyers in the country are still unacquainted with the concept of track days and end up clocking most of their riding time in between traffic lights. The 150R is comfortable, in the city and otherwise, and it's pretty fuel-efficient, too! Given its stance, you won't feel out of place having strapped some luggage onto the pillion seat for a long-distance ride, although you will definitely miss the grunt that its (cheaper) contemporaries have.

WHAT’S NOT TO LIKE?

While the absence of an engine kill switch is unpardonable, that Honda has kept even a headlight flasher out of the picture is truly disappointing. Also, a little bit of character from the motor would bring in some excitement into what is, mechanically, a potent motorcycle.

WHO SHOULD BUY ONE?

If you want a good-looking bike, like to ride long distances in an unhurried fashion and also want to commute on it regularly, you’ll quite like the CBR 150R. Comfort, refinement, fuel-efficiency and big-bike aesthetics — you can have it all on the 150R.

QUICK SPECS

Displacement: 1149.4cc, single-cylinder
Power: 17.6 bhp@10,500 rpm
Torque: 1.29 kg@8500 rpm
Transmission: 6-speed
Price: Rs 1.25 lakh (ex-showroom, Mumbai)

Bike with bite.

Husqvarna is a name most Indian bikers would only have heard of vaguely. Many upheavals in the Swedish brand’s rich history now has their bikes built in Varese, Italy. ‘Huskies’ as this marquee’s products are popularly known are generally focused, top class off-road motorcycles. With the Nuda 900R almost here via Navnit Motors, we sling a leg over the Nuda for a few hours to check what it’s about.

Although it is outlandish in its entirety, the details on the Nuda are incredibly stylish. The attractive instrument cluster houses an analogue rev-counter in the centre with telltale lights stacked on the left, while the LCD display on the right shows the speed prominently. The slashed exhaust with its carbon-fibre end-plate, clamp and shield, the cast-alloy side stand, the black anodised handlebar, the vented sprocket cover, motocross-cum-street footpegs, and the slinky grab handles for the pillion are stunning details on a masterful blueprint.

Overall, the Husqvarna makes its supermoto intentions quite clear. It is a tall motorcycle with an upright stance and offers a narrow and flat seat running from the tank to the tail section. The exposed trellis frame, big motor and massive rubber sit denuded underneath.

The 798cc liquid-cooled parallel-twin engine has been bored and stroked to stretch the displacement to 898cc. Bigger-diameter valves have been used to cope with the added displacement. Finally, instead of a zero-degree crank as on the GS, the Nuda uses a 315-degree crankshaft to deliver the character and power befitting a Husqvarna. To mark the motor out as a Husky engine, the cam cover is painted red.

The Husky comes well equipped too. It gets top-flight radially-mounted, four-pot mono-bloc calipers for the twin 320mm discs, with 48mm Sachs upside-down forks for springing duties. At the rear, there is a completely adjustable Ohlins unit and a 265mm disc with two-piston calipers. Shod in Metzeler rubber, the Nuda 900R is brimming with confidence.

Once you’ve clambered onto the saddle and thumbed the starter, you are greeted by a fantastic exhaust note. Bass, volume and the howl of trapped power waiting to break free all burst through the slashed exhaust in just the right mix. Sure, 103bhp might not sound like much for a near-litre-class bike, but the Nuda is high on adrenaline. Throttle response is, quite simply, frenzied.

The mildest twist of the right wrist sends the Nuda 900R charging forward. Hang on harder as you near the 4000rpm mark. There’s always a sense of confidence that makes this motorcycle thrilling rather than scary.

The Nuda’s ECU has an alternate ‘MAPII’ engine map that softens power delivery significantly. Suddenly, stop-go traffic is no longer a bother and even ham-fisted inputs won’t cause the Nuda to misbehave.

Both versions of the Nuda use double discs at the front. However, the bite from the 900R’s mono-bloc set-up is ferocious enough to rival the engine’s performance.

The steel-braided hoses provide a crisp feel at the lever and it takes only a light tap to check city speeds. A harder pull is only for shedding serious speed. The front 120/70 R17 Metzeler felt confident and rock-solid too. However, for such an edgy motorcycle, an ABS system would have been of great help in the Indian environment.

The Nuda’s design, components and character come together and tempt you to give the supermoto style of riding a shot. Given adequate time and space, the Nuda will have you sliding into corners spinning the rear wheel, and popping the front wheel on the way out. It’s a motorcycle that will urge you to man up and hone your riding skills.

Surprisingly, apart from the high seat, the Nuda is a bike that can be used regularly. The slim seat is a bit firm, but the pliant ride keeps things comfortable. Despite Mumbai’s roads throwing their worst at the Husky, the long-stroke front suspension and well-damped rear allowed only a few sharp edges to filter through to the rider. The generous lock-to-lock steering movement also makes it quite manoeuvrable. Husqvarna claims that the 13-litre fuel tank is more than sufficient to cover 260km between refills. However, the high-compression motor does require a premium fuel diet to keep it running without any hiccups.

If you are willing to brave the tall saddle, the Nuda 900R (built under the tutelage of German automotive powerhouse, BMW Motorrad) is among the more exciting street-worthy introductions to the Husqvarna brand. However, its Rs. 18 lakh (ex-showroom, estimated) price will make it a high that very few will be willing to stretch for.

Hero MotoCorp overtakes Bajaj Auto in volume growth

Unlike Bajaj Auto which saw flat profits, two-wheeler major Hero MotoCorp has managed a 10 per cent year-on-year growth in profits in the first quarter. This has been aided by Hero’s seven per cent volume growth, vis-à-vis the one per cent shrinkage in volumes recorded by Bajaj Auto.

Though this is still lower than the average industry growth of 10 per cent, Hero’s superior performance is due to two reasons. One, Hero’s strong foothold in the 75-125 cc bikes and secondly, its presence in the scooters segment.

LOWER SEGMENT BIKES SELL

Hero has about 73 per cent market share in the 75-110 cc bikes (CD Dawn, CD deluxe, Splendor, Passion) and about 32 per cent share in the 110-125 cc segment bikes (Super Splendor, Glamour , Ignitor). Both these industry segments witnessed better volume growth compared to the >125 cc segment. Bikes in the >125 cc premium segment, in which Bajaj is the market leader, witnessed a nine per cent shrinkage in volumes this quarter. High interest rates and petrol prices which saw customers downtrading to lower segment bikes, has worked in Hero’s favour.

Again, with offerings such as the Pleasure and Maestro, Hero was also able to take advantage of the strong demand for scooters during this period. Bajaj lost out on this front too.

Apart from higher volumes, what has helped profit growth is improved average realisations, thanks to price hikes. A stabilisation in raw material prices and lower advertisement spends during the quarter has helped margin expansion as well. Operating margins came in at 15 per cent, slightly higher than the 14.6 per cent recorded a year ago.

OUTLOOK

Considering the current market sentiment, Hero MotoCorp may continue to outperform, given the tilt in its product mix towards the commuter and mid-segment bikes. What may, however, challenge this growth expectation is the monsoon deficit, which in turn could dampen rural demand.

Bajaj Auto eyes 50% sales from exports in 3 yrs

Betting big on its international business, Bajaj Auto Ltd is expecting exports to account for 50 per cent of its total sales in the next three years, as it plans to enter new markets in Latin America such as Argentina and Chile.

"In the last three years we have doubled our exports. The world is our market and we will continue to find new markets," said Bajaj Auto Ltd (BAL) Senior Vice President (Business Development & Assurance) S Ravikumar.

Elaborating on the company's export plans, he said: "In the next three years our aim is to have 50 per cent of our total sales to come from exports."

Ravikumar said 35 per cent of the company's motorcycle sales are from exports.

Asked about international market expansion plan, he said: "We are looking to expand presence in the Latin American market. Currently, work is in progress to enter the motorcycle segment in countries like Argentina and Chile."
As per the company's 2011-12 Annual Report, BAL's exports rose by 31 per cent over the previous year to 15.8 lakh units. In terms of revenue, it stood at Rs 6,604 crore, accounting for 35 per cent of the company's net sales.

The company exports to 35 countries with the African continent its largest market accounting for 41 per cent of the total overseas shipments. It is followed by Asia and West Asia at 40 per cent for both motorcycles and three-wheelers.

In the motorcycles segment, the company's Boxer models is the largest selling single brand in Africa. In the Philippines, Boxer BM-150 and Pulsar 135 are the best sellers.In Latin America, where Bajaj Auto sells 20 per cent of its total motorcycle exports, Pulsar 135 ranks among the top selling motorcycle models, the company said.

Sri Lanka and Bangladesh are the top markets for the company's three-wheelers.

Dream Yuga - Rides like a dream

The feeling is stronger when you wake up to the fact that it’s only a 110cc bike. Please welcome one of the finer Hondas to town

Reviewing smaller capacity motorcycles isn’t an easy task.

One, your body has a hard time adjusting to the long rides motorcycling reviewers are subjected to—long rides on smaller capacity bikes generally get uncomfortable.

Two, the difference between any of the smaller capacity motorcycles available in India is often so insignificant that you have to get really intimate with your bike in order to figure these out.

Three, to over-exposed riders, smaller bikes mean touching the ‘boring’ end of motorcycling fun. So, when I got my hands on the Dream Yuga—the smallest bike Honda Motorcycle and Scooter India (HMSI) makes—I wasn’t all that excited! Although curious I was, since I have ridden everything from a Hero to a Bajaj to a TVS, but not a small Honda.

The body

Now we have a number of 100-odd-cc bikes in the country and, as far as design goes, they tend to be quite similar. (This is understandable, since adding unique design elements means higher costs.)

The Dream Yuga, too, at first glance, looks like any of the mass motorcycle segment machines. But a second glance shows that attention to detail has been paid by the Honda designers. The front cowl (including the headlamp assembly) is attractive and provides the required aerodynamics to the bike.

Stylish graphics have been added on the fuel tank, which go all the way towards the rear that has a body-coloured grab rail made of aluminium. The seat is long and provides ample space for two. The front and rear suspensions (the rear is a five-step adjustable one) give the bike a somewhat raised stance. Weighing a total of 108 kg, the bike is 2,022 mm long and comes with an impressive wheelbase of 1,285 mm. The ground clearance is 161 mm, enough for the raised speed-breakers you might encounter on some Indian roads.
The heart

Powered by a 109cc engine that pumps out a decent output of 6.35kw@7500rpm and a torque of 8.91nm@ 5500rpm, the Dream Yuga powerplant is impressive on paper. Fed by a carburettor, the bike gets a four-speed constant mesh (all back, N-1-2-3-4) transmission.

The wheels

The Dream Yuga comes with five-spoke alloy wheels shod with tubeless tyres that reduce the chances of immediate deflation in case of a puncture. Both sizes are identical—80/100-18.

The run

With 8.5bhp, the engine is a shade more powerful than most of the competition and it shows on the road. (The Dream Yuga engine is the same unit that powers the Honda CB Twister, though it seems to be tuned a bit more towards fuel efficiency.)

The gear ratios are just fine and the bike pulls equally well from all the gears at the right rpm. Mention must be made of the second gear, which is quite tall—meaning that the second gear pulls the bike from literally standstill to above 35kmph, and this makes riding the bike an easy affair in bumper-to-bumper (or I might say tyre-to-tyre) traffic conditions.

The first cog is also powerful enough for the bike’s size. In fact, at one of the traffic intersections, as soon as the light turned green and I let go of the clutch while pulling the throttle, the front tyre raised a bit!

It is at speeds over 60kmph where you feel you are riding a 125cc rather than a 109cc, given the way the engine, without much effort, pulls from 60kmph to 80kmph. But here we also feel the need for a fifth gear. Not only will it, theoretically at least, make riding easy by lowering vibrations (an extra gear means the bike will achieve higher speeds at lower rpm, and this means lesser vibes!), it might help better fuel efficiency too.

The bike, as expected in this segment, comes with front and rear 130mm drum brakes, which do the duty well, but only if you use both brakes. Here, Honda should have at least considered giving disk brake as an option.

The thirst

Unfortunately, the bike wasn’t with me for long enough to test its drinking ability, so here we go by the manufacturer’s claim of 72kmpl (in real-life conditions, expect anywhere around 55-60kmpl).

The ease

There is nothing great about the riding position but the fact that the long seat gives enough movement to the rider. For instance, after continuously riding for 25 km, when I felt my lower back almost numbing and neck muscles stiffening, an inch or two of sideways and back & forth movement readied me for another 10-odd kilometres of riding.

But considering the fact that smaller bikes are used for short-distance city commuting, the Dream Yuga doesn’t disappoint. The riding position is fine and you sit upright while holding the handlebars.
The need

If Honda can, without affecting affordability, include a fifth gear to the bike, a good product can be made better. Ditto with disc brakes as an option, since we always advocate safe riding. And the seat is too soft, so a firmer material might make long rides more comfortable. Otherwise, there aren’t too many gripes about a motorcycle that might define Honda’s growth chart and which Honda looks forward to in its ambitious goal of becoming the largest two-wheeler company in India by 2020.

The Dream Yuga is available in three variants. The base model costs R44,642, the middle one comes for R46,134, and you pay R48,125 for the & forth movement readied me for another 10-odd kilometres of riding. But considering the fact that smaller bikes are used for short-distance city commuting, the Dream Yuga doesn’t disappoint.

The riding position is fine and you sit upright while holding the handlebars.
The Dream Yuga is available in three variants. The base model costs R44,642, the middle one comes for R46,134, and you pay R48,125 for the top-end variant (prices, ex-showroom, Delhi).

Hero MotoCorp Q1 net at Rs.615 cr

Two-wheeler maker Hero MotoCorp on Thursday reported an increase of 10.3 per cent in its net profit at Rs 615.5 crore for the first quarter ended June, riding on the highest-ever quarterly sales volumes.

Its sales stood at 1,642,292 units, Hero MotoCorp said in a statement.

The company had posted a net profit of Rs 557.9 crore in the year-ago period.
Revenue from net sales stood at Rs 6,207.8 crore, against Rs 5,637.7 crore in the year-ago period, it said.

Commenting on the results, Managing Director and Chief Executive Pawan Munjal said: “It has now been more than a year since we began our solo journey, and the success story at Hero MotoCorp only gets stronger with every passing quarter.”

The company is stepping on the accelerator to expand its network within the country even as it enters new geographies globally, he added. However, Munjal felt the patchy monsoon might reflect on retail sales in rural and upcountry markets in the coming months.

“Currency volatility is also a point of concern and the rupee depreciation is likely to impact our margins. However, we remain optimistic of coming back to double-digit growth by leveraging our strong brand and the advantage of our wide network,” Munjal said.

Recently, the company had also announced an investment of Rs 2,500 crore in setting up two plants (in Rajasthan and Gujarat) and expanding capacity at existing ones, Hero MotoCorp said.

Shares of Hero MotoCorp on Thursday closed at Rs 2,087.5 on the BSE, down 1.37 per cent from its previous close.

Rajiv Bajaj: Working on global alliance with KTM, Kawasaki

Bajaj Auto is working on a global alliance with Austria's KTM and Kawasaki Heavy Industries, Japan, for selling motorcycles in the overseas markets, and is looking to achieve 50 per cent of its total sales through exports by 2016.

Speaking at the company’s AGM here, Mr Rajiv Bajaj, Managing Director, Bajaj Auto Ltd , said that the company has a target of doubling both sales and turnover by 2016 to touch 10 million units in annual sales.

“I estimate 50 per cent or more to come from exports,” he said.

“We are working on global motorcycles alliance with KTM and Kawasaki Heavy Industries to partner them in markets where we are not present like Brazil, Vietnam and Malaysia.

It is not easy to do this, ourselves,” he said, adding that discussions are under way. “We hope to conclude this soon,” he said.

SALES TARGET

The company’s current sales are at around 4.5 million units a year and the turnover at Rs 20,000 crore.

“Our goal is double sales, revenue, exports, and more than double the bottom line,” he told shareholders, adding that the strategy will remain the three-legged stool approach adopted in 2009.

“This three legged stool – sharp brand focus, global presence and variable cost – has served us well in the first phase of our strategy from 2009-2012,” he said.

The company had worked on a cost structure that was relatively immune to the upheavals in the market place.

“This is because we have invested more efforts in R&D and marketing than on production,” Mr Bajaj said, adding that their fixed cost as less than 10 per cent of sales.

Taking a dig at scooter manufacturers in reply to a question on when BAL will re-enter the scooter market, he compared the lower profitability of other two-wheeler makers with that of BAL and quipped, “In my opinion this is because they make too many scooters.”

DSK Motowheels to enter mass commuter space

DSK Motowheels is planning to enter the mass commuter segment by introducing a 125cc and 150cc variants, even as it remains focussed on the premium superbike segment in the short run, according to its director Shirish Kulkarni.

The company will now assemble, market and sell Hyosung bikes in India after its recent purchase of the motorcycle business of Garware Motors.

“DSK and S&T Motors (Hyosung) will work together to come up with new models in the 125cc and 150cc segments. These will be made in India for India,” he said, adding that the price points of these will put them in the same league as the Heros, Hondas and Bajajs among others.

The Hyosung business was loss-making for Garware and the latter sought DSK’s help in marketing. DSK, which did not want another dealership, offered to buy that out, he said.

The company, which now has a plant in Pune, is looking to set up a new plant entailing an investment of Rs 300 crore. Though it is keen on having its plant in Maharashtra, it is also studying options including Goa, Gujarat, Tamil Nadu and Andhra Pradesh, he said.

The plant will be up in two years with a capacity to make 100,000 units. The company is looking to launch the commuter bikes around the same time.

The plans to bring a battery-operated vehicle from Hyosung to India will take some time to fructify. “We will decide on the battery-operated model based the success it meets in South Korea,” he said.

DSK Motowheels on Wednesday launched GT 250R, a 250cc super bike priced at Rs 2.8 lakh. “This 250cc product will target the mass segment of superbikers who have been aspiring to buy (a superbike),” he said adding that Hyderabad over the last one year has received a good response.

Last year, it sold 611 units of super bikes and is hopeful of doing 1,000 this year. For the GT 250 R, it set a 2,500 unit target, he said adding that one more 250 cc super bike will be launched during the year.
There are now 18 dealers selling Hyosung bikes and the number will go up to 40 in a year, Kulkarni added.

Bajaj Auto PAT up 1% on Low Demand

 Bajaj Auto, India's second-largest two-wheeler maker, on Wednesday reported a 1% increase in profit after tax for the quarter ended June, when subdued domestic demand and disruption in exports took their toll on the company's performance.

It was the toughest quarter in recent times, company officials said, adding that an improvement is likely in the coming quarters.

The company reported profit after tax for April-June at 718 crore, up from 711 crore in the year-ago period. The net income grew at the slowest pace in 11 quarters, up 3.37% to 4,865 crore from 4,706 crore, due to sluggish volumes. Analysts said the company faces a rough road ahead. "The near-term outlook is challenging for Bajaj Auto, as sales in the domestic market are declining because of slowdown in demand and intense competition, and exports too will remain under pressure because of increase in duties in Sri Lanka and political unrest in Egypt," said Yaresh Kothari, auto analyst with Angel Broking. The company's numbers are below the brokerage house's expectations, Kothari said.

However, the company managed to stay in the vicinity of its stated target of 20% EBIDTA margins, posting 19.4% for the quarter, with a marginal improvement of 30 basis points.

"Considering that there were pressures of input cost, volatile currency and intense competition, attaining margins of 19.4% is good," Bajaj Auto's chief financial officer Kevin D'Sa told ET. "It was the toughest quarter in the recent times, but the forthcoming quarters will be much better, with new Discovers and Pulsars expected to draw higher volumes."

With two new products lined up for the domestic market and the situation in Sri Lanka and Egypt regaining normalcy, Bajaj is hoping to outpace the market growth of 7-8% this fiscal, D'Sa said. However, he admitted that meeting the sales target for the year would be tough, given the subdued market sentiment and the uncertain monsoon.

"Whatever we have lost in the first quarter, we won't be able to recover till the end of the year. It may be difficult to achieve the target of 5 million vehicles in 2012-13," said D'Sa. Ahead of the results, on Tuesday the share price had dropped almost 2% in anticipation of disappointing numbers. However, following the announcement on Wednesday, the share price recovered and closed 5.2% higher at 1,522.35 on BSE, in a flat market.

Honda pips Bajaj as No.2 two-wheeler firm

Sales volumes of the two firms, though, are “not strictly comparable” as Bajaj is not present in the scooter segment and draws 30% of its sales from exports, said an analyst

Honda Motorcycle and Scooter India Pvt. Ltd has overtaken Bajaj Auto Ltd as the country’s second largest two-wheeler maker by volume on a quarterly basis the first time since it began operations in 2001.

In the three months to June, sales at Pune-based Bajaj Auto slipped 0.75% from a year ago to 618,489 units, while Honda’s sales jumped 53.56% to 622,176, according to the Society of Indian Automobile Manufacturers, or Siam.

K. Srinivas, president, motorcycle business, Bajaj Auto, declined to comment on the numbers due to the mandatory so-called silent period before the company declares its quarterly earnings on Wednesday.

Sales volumes of the two firms, though, are “not strictly comparable” as Bajaj is not present in the scooter segment and draws 30% of its sales from exports, said Ronak Sarda, analyst at domestic brokerage MSFL Research.

Sarda expects Bajaj’s sales volumes to pick up in the months ahead with the company planning to despatch at least 35,000 units of its new Discover 125cc and Pulsar 200 NS models during the festival season.
Scooters accounted for more than half of Honda’s sales volume, said Y.S. Guleria, the firm’s operating head-sales and marketing.

Hero MotoCorp Ltd sold nearly 1.6 million units in the three months to June, more than double its rivals’ sales.

Honda has been stepping on the gas since it separated from the Hero group last year. Production capacity at its three plants will reach 4 million units by mid 2013.

Honda in May said its target is to be the No.1 two-wheeler maker in India by 2020. It aims to increase its contribution to its Japanese parent Honda Motor Co. Ltd’s revenue from two-wheeler sales to 30% by 2020 from 13% in fiscal 2012.

Bajaj has been ceding ground to Honda for some time now. In the three months to June, its market share slipped two percentage points to 17.57% while Honda’s share increased to 17.68% from 12.52%.

Bajaj Auto’s shares closed at Rs1,447.15, down 2.43%, in Mumbai trading, while the Sensex was little changed. Honda Motorcycle is not listed in India.

BMW to link up with TVS via its Husqvarna brand

Having seen KTM, Triumph and a resurgent Ducati eye a move to Asian markets, BMW wants in but without devaluing its brand equity. Using its wholly-owned Italian subsidiary Husqvarna to forge a tie-up with Hosur-based bike maker TVS is one of the tasty possibilities with immense ramifications not just for India but also globally. Adil Jal Darukhanawala outlines the story which has the makings of a win-win situation for both bike makers and motorcyclists in the region.
Adil Jal Darukhanawala.

The success of Austrian bike maker KTM hasn’t gone unnoticed in the European market. Especially by BMW which has been on song for the past few years with its range of superbikes, traditional boxers for road and endurance plus also its tourers and custom bikes. However, the era of large capacity, hyper machines seems limited though very profitable but it will stay concentrated in the developed world with next to no worthwhile movement in the large mass motorcycle markets of the world. Read that as Asia, South America and Africa where motorcycles are first the main means of personal mobility for work and utility plus commuting and then tools for pleasure and performance.

 And just like KTM has taken the India route to success and volumes, BMW has been exploring this route as well though it has as yet to come up with its exact game plan. However, there is a subtle difference between KTM and BMW in their India approach. Bajaj Auto has been a strong investor-partner in KTM and in fact brings a lot of its low cost yet hi-tech manufacturing ability to the table. The Indian firm is already the world’s third largest bike maker by volume, the most profitable as well in the industry and to top it all has a terrific product development programme underway with technology and skills sets it has developed over the last decade and a half.

 German bike maker BMW acknowledges what has to be the mantra to do the volume business and still stay relevant with its big bikes and that is to have a presence in Asian nations like India, China, Indonesia, Vietnam and Thailand. Trouble is it has no bikes less than 650cc of engine displacement and its scooters are way too trick and technologically proficient to be sold at prices prevalent in Asia. The obvious thing then is to set up an Asian base, preferably with a well established bike maker in the region to make a slew of small capacity machines ranging from 125cc to 250cc straddling various segments of the two-wheeler market.

 For this to work India seems to be the right hunting ground and while many will think Hero MotoCorp would have been the logical first choice, the obvious nameplate which can meet BMW’s objectives and turn them into a win-win situation would have to be TVS. The Hosur-based bike, scooter and moped maker (it also makes three-wheeled autorickshaws) is renowned for its engineering and low cost manufacturing skills. If that’s not all, it has a penchant for quality which would help tick many boxes in BMW’s checklist as to what a potential partner might need to sport and the overall prognosis seems pretty clear, BMW needs TVS more than I think TVS needs BMW! One can term this as an inane expression but there is pretty strong substance to this as will be made clear going ahead.

The Mystique of a global brand - Vespa

The arrival of the Vespa tells us about the aura that accompanies some global names.
There was a time when owning a scooter was an indication of some social standing. When everything was in short supply, possessing a scooter was no mean achievement.

Later, with rising levels of income, scooters became passé, and made way for the Maruti 800. That, too, passed, and ordinary Indians are now graduating to higher and higher classes of cars.

But despite the range of global goods and services at our disposal, the power of a global brand is something to be reckoned with.

One such is the ‘Vespa’ brand of scooters. It was recently announced that ‘Vespa’ is returning to India.

ICONIC BRANDS

The Vespa scooter is something of an icon, though admittedly a Western icon. It was such an icon in Italy where it was produced, that even a ‘crown princess’ could pillion-ride it.

Or, so it would seem to those who have watched the legendary 1953 Hollywood film Roman Holiday starring Audrey Hepburn and Gregory Peck.

The film, for those who are not familiar, is about a crown princess of an unknown country on a tour of Europe.

She accidentally meets a reporter, and then for a day escapes from her royal duties into a commoner’s life with the reporter. In the process, the princess falls in love with the reporter, who, incidentally, owns a Vespa scooter.

The queen rides on the reporter’s Vespa, even when pursued by the secret service police. They give the slip to the police, go around town — and finally, the secret service catches up.

To avoid a huge uproar throughout Europe, the queen decides to go back to her regal duties, despite her love pangs. On her journey back to her lonely castle, she is escorted by the reporter on his Vespa. The film was a huge success; so was Vespa — in Europe.

This goes to show the power of brand in the market.

The new makers of the scooter hope to ride on the iconic appeal of the brand name.

This is not the only instance of a global brand name trying to capture discerning Indian buyers, who will pay a hefty price for the brand name.

The German high-end automobile manufacturer BMW is bringing its equally iconic model, the “Mini Cooper”, into the Indian market. BMW cars are usually big, luxurious and priced at the upper end. They are packed with power, with their high-capacity engines, and are usually fuel guzzlers.

Mini, though from the BMW stable, is different. It is a small car, about as big as the Maruti 800. But its price is big.

Mini in India should cost around Rs 24-27 lakh, far above the price of larger luxury sedans such as Skoda Superb, Toyota Camry or Nissan Teana, which are priced at Rs 17-21 lakh. The reason is the brand appeal of a Mini, again an icon in the West.

A similar model is the Volkswagen Beetle. The Beetle was conceived as a people’s car in Hitler’s Germany. It was to be efficient, cheap and compact. Its success, however, gave it an international appeal. Volkswagen’s new Beetle, produced in Brazil, sells for its aesthetic appeal. Volkswagen, with full-fledged operations in India, brought its Beetle, priced at an exotic Rs 24 lakh-plus. It had incorporated various modern features and looked a little bigger in its new incarnation.

The appeal of global brands was brought home to Indians by none other than Rajiv Gandhi.

Those were the dying days of the control permit raj, when access to Western branded goods was extremely limited. Only top industrialists could access them. And no one dared to display them openly, for fear of attracting unwanted attention.

It was Rajiv Gandhi who blew all that away with his Ray-Ban goggles. Attired as an Indian Airlines pilot, and later as a politician, in white kurta-pyjama, Rajiv Gandhi would be seen in his golden-rimmed Ray-Ban glasses. For a while, India developed a craze for Ray-Ban.

‘FAIR AND LOVELY’

However, brand power was best told by marketing and advertisement guru Shunu Sen.

Sen was the marketing head of Hindustan Lever. Among its many products, Lever would offer what has come to be known as fairness cream.

The company was criticised for selling false dreams and pandering to prejudices. So the board of directors had decided to withdraw the product from the market, and Sen was charged with developing a strategy for its withdrawal.

During his market research on the product and exit strategy, Sen travelled the length and breadth of the country and eventually landed in a remote village in Uttar Pradesh, as far as I remember.

He looked for a provisions store and found one. Lo and behold! In the midst of old, withered products on display, there was a fresh new pack of Fair and Lovely.

Sen’s eyes lit up and he struck up a conversation with the shop owner, eventually proposing that Fair and Lovely should be withdrawn.

The shop-owner was startled and contested Sen’s view, saying the cream saved a bride’s family thousands of rupees in dowry. In other words, the villagers believed in the brand.

There ended Sen’s quest, and he asked the Hindustan Lever board to retain the product.

INDIA AND REGALIA

The last word in brand should possibly belong to Maharani Gayatri Devi of Jaipur. In her lifetime she had become a global icon for beauty, elegance, cultivated taste and India’s regalia.

When she died, The Economist published her obituary, something it does rather selectively. It ended that piece with how she tried to get rid of the foul smell in the cell she was confined to, by pouring French perfume into its drains.

French perfume had wafted across the entire complex that evening. Whether the story is apocryphal or not, it is pretty obvious that The Economist had bought into her brand.

The author is a Delhi-based commentator.

Pulsar; Boxer out to woo LatAm, Africa

Bajaj Auto scores over Chinese, Japanese bikes

While domestic two-wheeler firm, Bajaj Auto has been facing the brunt of intense competition from the foreign brands, the story seems to be the reverse in emerging markets.

The leading motorcycles such as Pulsar and Boxer from Bajaj have emerged as strong winners in several countries and have made the market tough and challenging for Japanese and Chinese brands.

“Wherever we are present, in overseas markets, we are fighting with Japanese and Chinese brands. It is heartening to see the success of our brand strategy in those markets. Pulsar is the market leader in various markets, including Peru, Columbia and in some of the South American countries,” K Srinivas, president – motorcycles, Bajaj Auto told Financial Chronicle.

“Our Boxer motorcycle is the market leader in Nigeria, where we entered six to seven years ago and it was strongly dominated by Chinese brands. Interestingly, Boxer is the top selling model despite being costlier by about 30 per cent than other competing brands. While we see a Pulsar mania in Latin American markets, it is Boxer mania in countries such as Nigeria in the Africa. It is the brand that pulls the customers in all these markets,” he added.

Even tough, Boxer is not seeing big sales in the domestic market, it is the largest selling brand in Africa. A new 150cc version of it, the BM-150 has been well received and presents good growth prospects. In Philippines, Boxer BM-150 and the Pulsar 135 were launched last year and were well received, with the latter helping Bajaj Auto to gain 34 per cent market share in the sports segment.

In Latin America, where Bajaj Auto sells 20 per cent of its total motorcycle exports, the business has grown by 43 per cent in FY12 over the previous year. Company has seen increase in market share with Pulsar Brand doing exceptionally well. Pulsar 135 ranks among the top selling motorcycle models in various Latin American markets.

Bajaj, the largest exporter of motorcycles from India, has been working with global marketing strategist Jack Trout on brand positioning and the success of its motorcycle brands in some global markets are the result of his association, pointed out Srinivas.

The company is exporting to about 35 countries.

“There is a lot of headroom to grow as we have addressed only 36 per cent (nine million units) of the overall addressable market of 25 million outside India,” said Srinivas.

“Since the developed markets like the United States and Europe have altogether different product and technology requirements as compared to emerging markets, they get naturally excluded as target markets for the Indian players. Accordingly, a large majority of two-wheelers exports from India are to developing markets like South Asia, Africa and Latin America. While the developing markets are quite large in terms of volume potential, their appeal from a profitability perspective is somewhat mixed,” an Icra report pointed out.

Auto sector: adverse product mix, forex volatility to hit Q1 margins

Of course, the magnitude of the impact will vary depending on the extent to which currency volatility has been hedged

After being hit by spiralling raw material costs for several quarters, auto makers would have gained from softer commodity prices in the June quarter (Q1). But unfavourable and volatile currency movements played spoilsport. Prices of aluminium and steel dropped from the December quarter, as did that of rubber.

An 8% depreciation in the Indian rupee against the dollar in the period would have negated these gains because auto firms import key raw materials, which become more expensive. Passenger car maker Maruti Suzuki India Ltd and two-wheeler leader Hero MotoCorp Ltd are likely to take a hit on imported raw materials and components, besides royalty payments. A preview report on the sector by Antique Stock Broking Ltd says, “Hero’s Japanese yen-denominated fixed royalty expense, which stood at around Rs. 205 crore in 4QFY12 (fourth quarter of fiscal 2012) is likely to revert to the around Rs. 220 crore level in the first quarter of FY13 (similar to the third quarter of FY12 levels).”
Of course, the magnitude of the impact will vary depending on the extent to which currency volatility has been hedged. For example, analyst reports express concern that Maruti has hedged its forex exposure up to the first six months of FY13, but given the currency volatility, fresh hedges are likely to be less attractive for the company. In the case of Bajaj Auto Ltd, a report by Prabhudas Lilladher Pvt. Ltd said that average realization per vehicle is expected to increase only by 2.4% year-on-year (y-o-y) as exports have been hedged at Rs. 51 to the dollar, restricting the benefit of a greater slide in the rupee.

Further, the June quarter will not see any gains because of operating leverage on account of strong volumes. Most brokerage firms that track the top five listed companies in the auto universe (Tata Motors Ltd, Maruti, Bajaj, Hero and Mahindra and Mahindra Ltd) reckon that June quarter aggregate sales volume grew by a mere 8% over the year-ago quarter, the lowest quarterly performance in three years.

Of course, the biggest slowdown was in the passenger car and commercial vehicle (medium and heavy truck) segments, while utility and light commercial vehicles fared a tad better. Two-wheeler segment volumes slowed to single-digit y-o-y growth for the first time in these years. This will change for the better only if fuel price hikes are contained and if interest rates start falling.

Undoubtedly, lower volumes and foreign currency volatility will weigh on the June quarter’s profitability. Brokerage firms’ consensus points to an average 150-180 basis points dip in y-o-y operating margins. Meanwhile, even the profitability of firms such as Bajaj, which is better than others in the universe because of its three-wheeler sales, will also see a margin contraction as exports of these vehicles to Sri Lanka suffered a setback in the quarter.

In the final analysis, the auto sector is likely to post a mere 8-10% y-o-y growth in net profit during the quarter. The Street already seems to have factored this into valuations. The BSE Auto Index, which was steadily outperforming the benchmark Sensex even as other sectoral indices were stumbling, has finally cooled off and underperformed in the last three months. The only trigger that can lift sentiment is higher volume, which in turn will be the result of lower cost of ownership of vehicles.

Eyeing TVS for supply, production of components: BMW Motorrad.

BMW Motorrad has said that it is talking to domestic two and three-wheeler firm TVS Motors for a tie-up which covers the supply and production of components.

This follows Chennai-based TVS’ filing to the stock exchanges on Monday that it is in discussions with the German company for a technology tie-up. However, Mr Venu Srinivasan, TVS’ Chairman, has said that an equity sale is ruled out. Business Line had reported this on Sunday.

On this news, TVS stocks on the BSE were up 8.6 per cent during intra-day trade on Monday. On Tuesday, the shares again rose 1.01 per cent to Rs 39.90.

“We are looking into India as well as into other Asian countries. The target is to find new partners for parts supply or production of components. With this regard, we had also some contacts with TVS,” a BMW Motorrad spokesperson said in a reply to e-mailed queries.

The BMW official added that there is currently no plan to bring sister brand, Husqvarna, to India.

BMW Motorrad President, Mr Hendrik von Kuenheim, had also paid TVS’s plant a visit recently and had praised it operations in the global media.
Smaller bikes

Industry insiders said that the move to tie-up with an Indian auto company for parts sourcing is likely a part of BMW Motorrad’s broader strategy to unveil smaller displacement engines (125cc, 250cc). At present, its global range starts from 650cc, while in India it does not sell bikes below 800cc.

With India’s two-wheeler market the second-biggest in the world, a tie-up with experienced local firms would help BMW target a captive market and also reduce its development and manufacturing costs.

“Smaller engines will widen its portfolio to a more mass market within the premium end. With an eye on volumes, such vehicles can be leveraged for growth in the emerging markets such as India and other parts of South-East Asia - since the developed markets are now saturated,” an industry analyst said.

UK-based Triumph, which has a facility in Thailand and is setting up its third global plant in Karnataka, is rumoured to have a similar plan - it is reportedly developing a 125cc bike for emerging markets. Meanwhile, US’ Harley-Davidson is also working on an India-specific bike. BMW Motorrad, which entered India in December 2010, currently operates through an import model and does not assemble locally. This makes its range expensive as they attract high import duties at 60 per cent.

“The motorcycle market for premium motorcycles in India is still quite small but is beginning to develop. Against this background, it’s been a strategic decision to enter the market now to be prepared for the expected future growth,” the BMW official said.

The German bike brand has three local dealers – in Delhi, Mumbai and Bangalore and sold 55 units in 2011. In the first half of 2012, it has already sold 45 units.

Raise that remote to salute the new AD Queen: Anushka sharma

She’s a Yash Raj girl and an SRK heroine. She has been chosen to play the lead opposite Aamir Khan in Rajkumar Hirani’s Peekay. She stars opposite Imran Khan in the Vishal Bhardwaj-directed Matru Ki Bijlee Ka Mandola. She has just been signed on by Anurag Kashyap for his Bombay Velvet opposite Ranbir Kapoor. Anushka Sharma is not only an it girl in Bollywood, the model-turned actress is also a top choice as brand endorser. We asked some ad gurus and marketing bosses why the Band Baaja Baaraat girl scores high on the brand stakes

Anushka is a very good looker, but she’s also a very good actress. That is something that really comes through in the Reliance Mobile and Netconnect ads. She doesn’t bother about her hair or make-up once the camera rolls. Being such a good actress, she always gives more than one option for me to shoot.
Her spontaneity in the ads makes the job easier for me. I have often been complimented on the ads being fun and charming and I have to say that a large part of the credit goes to Anushka. And does she speak fast! There are certain creatives that are too long and whenever I decide to ask the company to increase the ad to a 40-seconder from 30 seconds, she tells me, ‘Don’t worry Dada, I will speak fast’. And she manages to finish it in 30 seconds! She does come up with suggestions during the shoot, but once she sees what I have planned is correct for the ad, she never argues. SHOOJIT SIRCAR (The Vicky Donor maker has directed Anushka and Rannvijay Singha in the Reliance ads)

Anushka is a perfect choice for our range of Scooty Pep two-wheelers because she represents its brand values — she is bubbly, has a mind of her own, is dependable, arrests attention wherever she goes and is also very good-looking! Not many people know that Anushka was a TVS endorser even five years ago, when she was a model. H.S. GOINDI, President, marketing, TVS Motor Ltd

The basic brand idea of Kara Skin Wipes is how it is a more new-age hygienic habit as compared to the ritual of washing our face and so we felt that Anushka being a modern, new-age and with-it celebrity would be a perfect fit. The Kara Skin Wipes communication urges you to let go of a ‘dirty habit’ and opt for a more hygienic one and we felt that Anushka would have the knack and the personality of coercing the consumer to try out the brand without coming off as rude or forceful. She has that rare quality.
MAHUYA CHATURVEDI, Global head, Marketing, Aditya Birla Group

Anushka Sharma was signed on last year for NIVEA Body Lotion and NIVEA Female Deodorant. The association has been fantastic and it has helped build awareness and hence generate trials for both the categories. Anushka embodies the NIVEA core values of honesty, trust and care. She also helps contemporise the brand NIVEA and makes it relevant for today’s consumer. Given that she has been an avid user of NIVEA products since her childhood brings a lot of credibility to the association.
SUNIL GADGIL, Marketing Director, NIVEA India

We signed on Anushka last year, a few months after Band Baaja Baaraat became such a huge hit. Face washes belong to a youth-targeted segment and we wanted someone who would appeal tremendously to the youth. We found that young and fresh face for Joy Skinfruits Face Wash in Anushka. Working with her has been extremely smooth. The best thing about her is that she is very particular about the brands she endorses. SHIMUL MALLICK, Senior brand executive,Joy Cosmetics

From whatever I have seen of Anushka in her films and brand endorsements, she comes across as very lively and energetic and these are attributes that work well with advertisers and manage to hook the audience. She has a certain likeability that compels you to listen to what she is saying. I think she has done a really good job in choosing her brands so far, but she should be careful that there is no overkill.
PIYUSH PANDEY, Executive Chairman & Creative Director, South Asia, Ogilvy & Mather

Though she isn’t as good-looking as some of the other actresses, Anushka Sharma scores with her effervescence and her ability to speak well. She also has a very lively face and looks like someone who could be a helpful neighbour and a good friend. These qualities really work well for a brand endorser and that explains Anushka’s popularity.  ALYQUE PADAMSEE, CEO, A.P. Advertising

The best thing about Anushka Sharma is that she is no bimbette and so when she talks, whether it is in films or an ad, you feel like listening to her and trusting her. I personally feel that she is among the best in the new-age crop of Bollywood stars, with a beautiful face, great sex appeal and brains to match.
PRAHLAD KAKKAR, CEO, Genesis Productions

Hero Motocorp plans record output even as stock piles up

Ignoring its large pile-up of unsold motorcycles, Hero MotoCorp Ltd is preparing for record production as the festival season approaches, according to people familiar with the company’s plans.

Hero has asked its parts suppliers to gear up for production volumes of 600,000 units in September, its highest ever, said one of the suppliers, requesting not to be named.

The plan is in line with Hero’s aim to sell 1.1 million units during the festival season, said another person.

This, despite the firm being saddled with unsold stock of close to 50,000 units at its plants in Gurgaon and Daruhera in Haryana and Pantnagar in Haridwar.

“Last year, our retail sales crossed one million units of two-wheelers during the festive months of October-November. This year also, we do plan to exceed last year’s retail sales,” Anil Dua, senior vice-president, marketing and sales, Hero MotoCorp, said in an email response.

“Accordingly, our production will be in line to meet this objective. Our dealer inventories will move as per our plans and norms so that they have enough stock to meet the expected market demand,” he said.

Hit by high petrol prices, costlier finance for buyers and negative market sentiment because of a slowing economy, two-wheeler sales in India expanded at 11% to 2.3 million units in the first two months of this year, slower than the 18% growth in the same two months last year, according to the Society of Indian Automobile Manufacturers, or Siam.

Crisil Research estimates two-wheeler sales grew by around 10% in the first quarter of this fiscal, slower than the 17% growth in the first three months of fiscal 2012.

The increases in petrol prices despite subsequent cuts shocked customers and have hurt auto sales but there have been no offers of cash discounts or price cuts by companies so far, said Umesh Karne, auto analyst with Brics Securities.

And with the monsoons being below average this year, analysts are skeptical about the festival season offering a respite to slowing two-wheeler sales. Monsoons in India were 49% below average in the week ended 4 July, data from the weather office showed. The rains are crucial for India’s agrarian economy, especially in the small towns and villages that account for a large portion of two-wheeler sales.

Experts are skeptical about Hero’s plans as well.

“Companies always tend to push stocks in anticipation of strong demand in the festive season. However, whether the market will absorb it depends on how the festive season pans out,” said Mahantesh Sabarad, senior vice-president (equity) at Fortune Equity Brokers Pvt. Ltd. The firm had estimated that India’s two-wheeler market would expand 11% by the turn of the fiscal, but Sabarad said it may now cut that forecast because of the poor monsoon. On Monday, Siam said it expects to lower its growth forecast for India’s overall automobile industry to single digits, from its present estimate of 10-12% growth.

Two other people familiar with Hero’s plans, also requesting anonymity, said the aggressive production and sales targets are the first step towards the company achieving its sales objective of 10 million units by 2015.

“We understand that there are some constraints amid a slowing market,” said one of them, a senior executive at one of Hero’s plants. “But the company thinks that it is a matter of time before the domestic market recovers. We want to go ahead with our plans and targets.”

Hero, the country’s largest two-wheeler maker, despatched 1.6 million units to dealers between April and June, a spokesperson said. The retail sales of two-wheelers is a cyclical process and dependent on several variables such as the economy, the monsoons and the festival season, and dealer inventories keep fluctuating according to these variables, the spokesperson added.

Dealers for Hero and its erstwhile partner, Honda Motorcycle and Scooter India Pvt. Ltd, are seeing two-wheelers piling up. “There is excess supply of Hero and Honda motorcycles at the dealer level,” said Kamal Bhandari, who owns K International Automobile, a consultant and financier for two-wheelers in Chennai. “This is in contrast to the long waiting period seen till seven months ago” for Honda, he added.

Makoto Yoshi, operating head, south, Honda Motors, did not respond to email queries. Yadvinder Singh Guleria, vice-president, operating head, sales and marketing of Honda Motorcycle, was unavailable for comment.

Honda displaced TVS Motor Co. Ltd as India’s third largest two-wheeler maker, selling 1.9 million motorcycles and scooters last year and capturing a 14.9% share of the market. TVS sold 1.8 million units last year.

“Yes, there is glut in the market, but not for us,” said R.R Manohar, managing partner of Ramkay TVS, the largest dealer for TVS motorcycles.

The dealer has reduced its stock to 21 days from holding a one-and-a-half-month inventory in April last year. But monthly average sales dropped to 1,600 units in the first quarter of fiscal 2013 from 1,750 units in the first quarter of fiscal 2012.

“Our interactions with two-wheeler market participants show high levels of dealer inventory across larger manufacturers for the past few months,” said Ajay Srinivasan, director, industry research, Crisil Research. The inventory with dealers is four-six weeks as against normal inventories of around two weeks, he said.

Last year, while unveiling Hero’s new brand identity in London, chief executive Pawan Munjal said the company aimed to cross 10 million units in sales with a turnover of $10 billion in five years. Accordingly, Hero recently announced it will invest Rs.2,600 crore on expanding capacities, building new plants and developing its own research and development centre.

Hero is also expected to enter the 110cc segment, where it does not have a presence, during Diwali with the Passion XPro, which will compete with Honda’s recently launched Dream Yuga. “We have launched Ignitor 125cc recently, despatches for which have already started. Another motorcycle will be coming by the end of this year. The company hopes to drive sales through these products, along with scooters Maestro and Pleasure,” said the Hero plant executive mentioned earlier.

As a run-up to the festival season, Hero plans to despatch an average 5,000 two-wheelers across its 1,200 dealers in the country, said the other person familiar with Hero’s plans.

Two-wheeler makers typically despatch 10% more units to dealers during the festival season; but with the monsoons yet to arrive, Hero may see its inventory build up from November, said Surjit Singh Arora, analyst at brokerage Prabhudas Lilladher Pvt. Ltd. “Should the present scenario continue, despatches to the dealers reported by the company will see a sharp drop month-on-month. So far, the stock at the dealers is not alarming,” he said.

Bajaj shrugs off Honda threat

Kolkata: Bajaj Auto does not really care if Honda Motorcycle & Scooter India (HMSI) pips it to the second spot in the two-wheeler standing in the country. It is more keen to remain the second largest motorcycle manufacturer in the country and the world’s thirdlargest bike maker.

Speaking to TOI on the sidelines of the launch of Discover 125 ST that Bajaj claims is the first sports tourer, Bajaj Auto president (motorcycle business) K Srinivas said the company was completely focused on motorcycle business and could not be bothered less about a company that manufactured both bikes as well as scooters.

“We want to stay the No. 2 player in motorcycle business and increase our marketshare from 24-25%,” he said. HMSI is the third largest two-wheeler manufacturer at present. It sold 2.1 million units last year, half of them scooters and the rest motorcycles. It is augmenting manufacturing capacity to four million units and aims to roll out 10 million twowheelers per annum by 2020.

Last year, Bajaj sold around 2.5 million units, all motorcycles. Hero MotoCorp, the world’s largest player, manufactured around 5.5 million units, most of them bikes. While Bajaj has a long way to go to catch up with Hero, it has an eye on HMSI’s Japanese parent Honda Motor Co that is the world’s secondlargest bike manufacturer. Hence, though there is no retail growth in the industry, Bajaj is augmenting its plant capacity from 4.25 million units to 4.75 million units per annum.

Srinivas admits the company does have the sights set on global positions. “We aspire to be a global leader in motorcycles because we are a motorcycle specialist unlike others who delve in multiple products. Right now, we are the most profitable motorcycle company in India, and perhaps, even in the world. But to be a world player, we need to be present in bigger
numbers across the globe,” he said.

Last year, Bajaj exported around 1.5 million motorcycles to 55 countries in South and West Asia, Africa and Latin America. It has, however, not forayed in Latin America’s biggest market Brazil and the presence in European Union is through European KTM in which Bajaj has 47% stake. Incidentally, KTM is the second-largest brand in Europe after BMW. “Pulsar is the leading brand in Colombia, Peru and Philippines. In Nigeria, Boxer is way ahead of competition, while in Bangladesh and Sri Lanka, Discover, Pulsar and Platina are all leaders. As Bajaj attains leadership position in other global markets, we will inch closer to those ahead of us,” Srinivas added.

TVS Motor Company zoomed 13%

TVS Motor, which is in a short-term uptrend, zoomed 13 per cent with good volumes in the previous week. After hitting a 52 -week low of Rs 31.9 on June 4, the stock changed its direction triggered by positive divergence in daily moving average convergence divergence indicator and weekly relative strength index as well as price rate of change. Moreover, the stock has significant long-term support in the zone between Rs 30 and Rs 33. The stock is trading well above its 21 and 50-day moving averages.

We notice that there has been an increase in weekly volumes over the past three weeks. The daily RSI is hovering in the bullish zone and weekly RSI is moving higher in the neutral region.

The daily MACD is climbing higher in the positive terrain implying upward momentum. Though the stock’s intermediateterm

trend is still down, its short-term uptrend looks promising. Both daily and weekly price rate of change indicators are

hovering in the positive terrain implying buying interest. We are bullish on the stock from a medium-term perspective. We believe that the stock has the potential to trend higher and reach our price target of Rs 50, with a minor pause around Rs 45. Investors with medium-term perspective can consider buying the stock with stop-loss at 36.

(This recommendation is based on technical analysis. There is a risk of loss in trading.)

Bajaj plans to roll out superbikes from KTM stable

Having tasted success with one of KTM’s superbike models, Bajaj is looking to create a space for itself in the segment. Superbikes refer to high-end sports bikes.

According to KTM’s 2011 annual report, KTM in 2007 had entered into a partnership with Bajaj.

“The focus of cooperation lies on common development of street motorcycles in the entry segment 125 cc to 375 cc. Last year, the first jointly developed model (125 Duke) was successfully launched,” it stated.

Good response
Later, this year, 200 Duke was launched in India.

“The response (to 200 Duke) has been very well. We are selling about 1,000 units a month.

“We want to exploit this super sports segment with multiple products from KTM stable,” Mr K. Srinivas, President, Motorcycle Business, Bajaj India, said here on Thursday.

He was in the city for the launch of Discover 125 ST in West Bengal.

Austria-based KTM is the second largest bike-maker in Europe. Bajaj Auto, through its wholly-owned Netherlands subsidiary Bajaj Auto International Holdings, has 47 per cent stake in it.

According to Mr Srinivas, Bajaj has “a definite plan” to create its space in super sports segment and introduce new models but refused to divulge details.

Chakan unit
Incidentally, two of KTM’s models are manufactured from its Chakan unit in Maharashtra.

The models are exported to Europe and Japan.

“The KTM products are built on same line of Chakan unit as the Pulsar. KTM has its own network in Europe and the US,” he added.

Auto body hopes SUVs will drive vehicle sales

New Delhi, July 10:  The flurry of launches in the sports utility vehicles segment is expected to drive growth in the automobile sector this fiscal, vehicle manufacturers body Society of Indian Automobile Manufacturers (SIAM) has said.

It raised the passenger vehicles (PV) growth target by a percentage point to 11-13 per cent, from its April projection of a 10-12 per cent sales rise.

This revision comes as a surprise as auto sales have been challenging this year, posting a moderate growth since April on depressed market sentiments.

Diesel-dominated utility vehicles (UVs) are expected to boost the overall PV sector on a strong 29-31 per cent rise (from 10-12 per cent previous growth projection).

In contrast, car sales growth has been downgraded by a percentage point to 9-11 per cent – largely on falling demand for petrol vehicles.

“The revision is based on our econometric model. We see a positive sentiment on the back of dropping petrol prices, an expected lowering of interest rates and a plethora of new models being launched at very competitive prices,” said Mr S. Sandilya, President of SIAM.

In the first quarter ended June, PV sales have grown 10 per cent boosted by a 51 per cent rise in UV sales.

Car sales in the first three months have gone up five per cent.

The growth projection for total auto sales has also been increased by a percentage to a similar 11-13 per cent rise.

The auto body expects three-wheeler (0-2 per cent) and commercial vehicle (six-eight per cent) segments to both record a lower growth than its previous projections.

However, depending on proper monsoons, two-wheeler sales are expected to maintain the previously announced target of 11-13 per cent growth.

“Bus sales are up mostly for tourism and school bus demand. Implementation of the second JNNURM scheme should help boost demand,” Mr Sandilya said.

June Sales
Total domestic auto sales last month were up nine per cent, though total exports fell nine per cent on slow overseas demand for two and three-wheelers.

PV sales in June were up 11 per cent.

This was led by market leader Maruti Suzuki’s 19 per cent growth attributed to strong demand for diesel models and the low base of June last year when it lost production for half a month due to strike at its Manesar plant.

Hyundai’s sales were flat, while Tata Motors saw a 14 per cent dip on slow demand for the Indica and Indigo range.

Mahindra & Mahindra, which mostly had diesel-powered UV models such as the Scorpio and Bolero, saw sales going up 26 per cent.

CV sales growth in the month was slower at five per cent, even as three-wheeler sales rose four per cent.

Meanwhile, two-wheeler sales were up nine per cent, with Hero MotoCorp posting a four per cent rise,

Honda 57 per cent and Bajaj Auto growing by one per cent.