Angry Bird - Thunderbird

The Thunderbird . Ah, if there’s one motorcycle that splits the diehard Royal Enfield community right down the middle, it’s this one. Built to appeal to the Indian mass-market, the Thunderbird was the streetbike’s half-hearted cruiser cousin, a Harley-esque take on a classic British single platform. Agreed, it had its strong points — chief among which was comfort — but the compromises in styling and handling were too much to bear for many, things that the chaps at Royal Enfield were carefully noting down all this while. This new Thunderbird 500 is meant to be a more complete cruiser, something that will rope in newer buyers without completely alienating the seasoned die-hards who treat their motorcycles like spoilt mistresses. Is it all that? Well, let’s just say that after riding it to the hills south of Bangalore, I got off the bike with a smile thinking — ‘Hmm. Interesting.’

Another sticker-job, you ask? Not quite. If you thought the earlier Thunderbird was a departure from the standard Brit single-cylinder line-up, get ready for some more deviation. Yes, the day has come when Royal Enfields are coming out of the gates at Tiruvottiyur replete with an H7 projector headlamp, running lights and a multi-information digital display. Don’t get me wrong — they look quite impressive in real-life — but ‘Royal Enfield’ and ‘projector headlights’ appearing in the same sentence takes some getting used to. Evolution also has brought along a split-seat, new fenders, completely new rear lighting fixtures and a lot of other, smaller changes in tow. This thumper is the first to shed its need to have old-world charm and it’s moving along swiftly into the new age — ‘retro-modern’ is the term thick spectacled design-types would use. It’s certainly not beautiful but then, it’s not bad looking either, is it?

But beyond what meets the eye, the most impressive aspect of this new Thunderbird is the handling. Yes, handling. The earlier Thunderbird wasn’t exactly the most pleasant bike to push through twisty roads but wait till you ride this new Thunderbird, because this lady, fat as she is, can tango. Starting off with the Classic platform as a starting point, Royal Enfield has slapped on beefier 41 mm forks, a 240 mm disc brake at the back, an all-new swingarm, better performing MRF Zapper tyres and shortened the wheelbase to give us the best handling Thunderbird till date. Charging up a tight mountain road has never traditionally been a Thunderbird forte, but things are much different now. For a feet-forward cruiser, this motorcycle can hold its own in the corners and you’d be surprised at the flickability and confidence it displays. You even surprise yourself a little when you’re leaned over a fair bit — increased cornering clearance helping there — and you realise that your feet aren’t folded back, your spine is upright and your arms are resting on comfortable handlebars. Handling is close to Classic territory now, so much so that you could give the Classic boys a run for their money. Sitting at the back of the pack isn’t something the new Thunderbird wants to do.
Let’s not forget that the Thunderbird’s primary role, still, is touring and a lot of changes on this new Thunderbird are tailored to improve that experience. For example, with a new 20-litre tank, the 500 can do Mumbai-Goa in one full tank but the 350 can better that with a 600 km+ range. Also helpful are the mounting points at the back for your luggage, refined ergonomics and seats that are designed to be comfier. With suspension that is reasonably plush in most conditions, I personally found the setup to be comfortable but a few might not. Either ways, it’s much better than the cramped pillion seat where the backrest is a pain in the backside. Quite literally. Also, be careful whom you place there because it is quite intimate two-up — we’d definitely recommend the prettiest girl around.

Power is significantly upped compared to the older Thunderbird courtesy the 500cc fuel-injected UCE motor . Its 27.2 bhp of power and 4.2 kgm of torque are delivered in the all-too-familiar Royal Enfield manner. Like the Classic, the gearbox isn’t perfect and the travel is at times a bit much but hey, it’s these little characterful things that make a Royal Enfield, no? It’s best to keep the motor in its mid-range, riding the thick band of mid-range torque and going through the gears quickly. 100 kph all day, everyday is no problem. But go beyond that and that’s where the niggles start to raise their ugly heads in the form of vibrations through the bars and the pegs. Keep her steady at 3500 revs on the highway and she’ll do 100-105 kph all day long without a fuss. That’s where the Thunderbird feels best — out on the open road, eating up the white lines with the intake sound as the lead singer and sadly, the classic thump only providing backing vocals. I realised that if you manage to take your mind off the vibes — sing, think, enjoy the scenery, it’s not that difficult, really — you can even hold 110-115 kph consistently if the road is up to it.

It’s a fairly straightforward deal here — it’s faster, it's quicker, it handles much better, it’s much better equipped, more suited for touring duties and it makes pancakes on Sunday mornings as well. Okay, scratch the last one but if all goes well, for a considerable percentage of our buying population, they wouldn’t want anything else. The earlier Thunderbird wasn’t a seller for nothing. As for the pricing, well, considering the goodies, the Rs 1.82 lakh on-road, Mumbai for the 500 is on the pricier side of things. The similarly specced 350’s price tag reads Rs 1.43 lakh, on-road, Mumbai and it’s certainly a more enticing price tag. The carbureted 350’s value is hard to beat and you really will have to cough up a lot of dosh for the 500’s added horsepower; so, unless you really want a thirstier, much torqueier motor, save yourself the 40 grand. Like it or not, it’s the best (and only) proper touring-oriented motorcycle we have in production today and save for the vibes on top and a few other niggles, it’s got things right in a lot of places. For a good chunk of buyers, this is going to be a very tempting buy. Finally, the motorcycle lives up to its name.

Oriental Bank in vehicle financing pact with Bajaj Auto.

Oriental Bank of Commerce (OBC) has signed a Memorandum of Understanding (MoU) with Bajaj Auto Ltd to provide finance for customers who intend to buy the latter’s auto-rickshaws.

The MoU was exchanged between Atul Gautam, General Manager-Retail, OBC and Amit Dongre, Head Retail Finance, Commercial Vehicles, Bajaj Auto, in presence of Bhupinder Nayyar, Executive Director, OBC.

This loan will be available at all the 1,880-plus branches of this public sector bank.

It would particularly benefit people in rural and semi-urban areas where big potential exists for gainful self-employment by plying auto-rickshaws, Nayyar said.

Bike ad treads Iyer and ire

This is a story of an ad campaign cast(e) in a different mould going awry.

Put it down to thin skin, the hunger for publicity or our ever-expanding republic of hurt sentiments but Hero Motocorp Ltd, the largest motorcycle manufacturer in India, finds itself defending an advertisement in which it called its popular Splendor bike ‘Iyer’ in Tamil Nadu. A little known organisation from Coimbatore has lodged a complaint with the Commissioner of Police of that city, seeking action against Hero Motocorp, ad agency JWT which devised the campaign, and the newspapers that published the advertisement.

The complaint? ‘Iyer’ is part of the Brahmin caste and the advertisement has “denigrated” the community by using it as a surname for a mere machine, says the Brahmin Youth Federation of India (BYFI), which is seeking action for defamation.

Hero, to drive home the point that it’s best-selling Splendor has become an integral part of the Indian family called the bike ‘Splendor Iyer’ along with the picture of a jovial father-daughter duo named Shivram Iyer and Sowmya Iyer. This was a pan-India campaign, and the bike was given different surnames appealing to local communities. In Mumbai and Karnataka, the bike was called Patil, while in Gujarat it was Patel and in Delhi, Chauhan.

“How can they give the Iyer surname to a machine? It is cheap creativity without responsibility to give the Iyer surname to a machine which is inferior to human beings,” K. Ramasubramanian, national convener, BYFI, said, speaking on the phone from Coimbatore. “Had they given any other surname, it could have created law and order problems in Tamil Nadu. We are silent people, and they are taking us for granted and making fun of us. It is a part of the agenda to show Brahmins in a poor light in the mass media.”

According to a Hero MotoCorp spokesperson: “The recent communication of Splendor in various national and regional dailies showcases the bike as part of happy families across India. We have depicted multiple societal groups in these campaigns with the objective of connecting with the people by using local flavours, e.g. local language and local family names.”

Marketing experts also agreed with Hero’s point of view. “In fact, the company has respected the community. It has to be seen positively. The brand has given respect to the surname by getting associated with it. One should feel proud,” said Mr Jagdeep Kapoor, Chairman & Managing Director, Samsika Marketing Consultants.

Munjals set 2014 date for first Bike sans Honda Knowhow

Hero developing 250cc sports bike along with technology partner Erik Buell Racing

Almost two years after breaking up with Honda and with the erstwhile Japanese partner now fast and furiously on its trail,Hero MotoCorp is pulling out all stops towards unveiling its first indigenously-developed motorcycle an all-new 250cc sports bike at the next Auto Expo in 2014.The motorcycle is being developed in collaboration with Hero Motos American technology partner Erik Buell Racing (EBR),two persons involved with this closely-guarded project who did not want to be named told ET.One of those persons added: Hero is determined to showcase to the world its capability and competence in bringing world-class products with superior technology on its own in quick time.It is currently working on several models ranging from low-engine displacement to higherpowered motorcycles and scooters.However,the first bike on a new platform to hit the market will be a 250cc motorcycle. A group of young and highlyskilled engineers from Hero Motos R&D centres in Gurgaon and Dharuhera have been stationed at the EBR centre at East Troy in Wisconsin,US for the past several months,and are working very closely with EBR engineers on this project,the persons close to the project said.The high-powered 250cc bike with cutting-edge technology and next-generation styling has been jointly conceptualized,designed and developed by Hero and EBR engineers.While the initial development is being done at the EBR centre,the complete development and manufacturing of the bike will be done at Heros plants in India, said one source.Hero MD & CEO Pawan Munjal is personally monitoring the progress of the project.The company has set a deadline of the Auto Expo to be held in Greater Noida in February 2014 to showcase the bike,with mass production likely to commence later during that year.This bike is being developed for the domestic market as well as for customers in global markets that Hero Moto plans to enter as part of its ambitious international business plan, said one of the persons close to the project.ET could not reach Munjal for his comment as he was travelling overseas.A Hero MotoCorp spokesperson declined to comment on the development plans.In response to a questionnaire e-mailed to him,he said: We do not wish to comment on speculations regarding our future line-up of products.We have already stated in recent past that we will be launching our own products in calendar year 2013.We shall be in a position to talk about specific models closer to the time of their launch.

Auto recalls double in 2011-12 as firms try to retain buyers

Vehicle recalls on account of manufacturing defects have doubled in 2011-2012 compared to 2008-2010, but does that mean cars and two-wheelers are deteriorating in terms of quality standards?

No, feels the industry. Increased consumer awareness and cut-throat competition are compelling automakers to improve quality levels by acknowledging faults with vehicles even after sales. This has led them to offer ‘free replacement’ of parts without the fear of being branded for poor quality. So far, many companies viewed the ‘recall’ tag as a dangerous word, so much so that they often played it down by calling it ‘free fix’, ‘maintenance checks’, ‘upgrades’ or ‘free service’.

In 2012, there have been five recalls — one each from Honda Motorcycle & Scooter, Toyota Kirloskar, Mitsubishi, Ford and Tata Motors. Mitsubishi, however, called it a “field repair”. In 2011, there were five as well — two from Honda Car and one each from Toyota Kirloskar, Maruti Suzuki and Tata Motors. Toyota Kirloskar also did not call it a recall though. Compared to this, over 1997-2010, there were just about eight vehicle recalls.

Deepesh Rathore, MD, IHS Automotive India, feels that the market is maturing to a point where companies are forced to acknowledge manufacturing defects before customers face problems.

“It’s a good thing when a company recognises a defect and is bold enough to offer a free fix, because brand goodwill goes a long way. Any company that hides a recall or chooses not to call it such, probably does not think the Indian consumer is mature enough,” he added.

What underlines this change is that the battle among automakers is now moving to the after-sales arena, where the aim is to improve overall ownership experience. This is important to maintain brand loyalty at a time when the average period of car ownership has almost halved to only 4-5 years.

“Auto companies now feel that it is first important to improve the ownership and dealer experience for the customer,” a senior industry official said.

The industry has also been pushed by Society of Indian Automobile Manufacturers’ (Siam) new voluntary recall code unveiled this July and the government’s plan to develop a mandatory mechanism for fixing such defects and penalising the errants. With a system in place, companies are encouraged to announce recalls.

“Earlier, companies were not obliged to inform either Siam or the media, so they contacted customers directly. When we are designing this, members initially felt it may look like a stigma, but now it shows proactiveness by the industry. They gather data on potential defects when cars come in for servicing,” a Siam official said.

Siam added that it is open to a third-party enforcing recalls and gathering consumer complaints that can be aggregated and passed on to the companies. “The government can come up with norms on this or create a common website. It has to be a third party to give confidence to the consumer. We can’t be an auditor for ourselves,” the official said.

Harley-Davidson launches Fat Bob at Rs 12.8 lakh

Harley-Davidson India on Thursday launched the Fat Bob model priced at Rs 12.80 lakh (ex-showroom, Delhi).

Assembled at the company's facility at Bawal, Haryana, this new addition from the Dyna family expands its portfolio of completely knockdown (CKD) models to six.

"The launch of the Fat Bob as CKD will allow more customers to experience our Dyna range at an attractive price point. At Harely-Davidson India, we will continue to adopt and invest in strategies that make our products and ownership experience accessible to more enthusiasts and customers in India," Anoop Prakash, Managing Director, Harley-Davidson India, told presspersons here.

The new motorcycle has a 1585 CC engine with a six-speed cruise drive transmission and a fuel tank capacity of 18.8 litre.

Harley Davidson India, which started operations in 2009, offers 13 models that are available at its nine authorised dealers in the country.

The company will open its tenth showroom in Goa by the year-end and another three next year in Jaipur, Indore and Pune, Prakash said.

The company sold around 1,000 units last year (2011 calendar) and it expects to close this year with double that number, he added.

Honda overtakes Hero MotoCorp in 125-150 cc segment

A little over a year since the termination of the joint venture with the Munjals-promoted Hero MotoCorp , Japanese auto major HondaMotorcycle and Scooter India (HMSI) has made strong strides in the two-wheeler segment in India and overtaken its former partner in premium motorcycle sales in the 150-cc segment.

According to Siam (Society of Indian Automobile Manufacturers) data, Hero’s sales in bikes with engine capacity between 125-cc and 150-cc declined by a steep 53 per cent to 80,303 units between April and October in FY13, while HMSI ’s volumes went up by 76 per cent to 134,650 units. Interestingly, HMSI sold 54,347 units more in the 125-150-cc segment than Hero, despite not having introduced any new products in the category. In the corresponding period last year, Honda was trailing behind Hero by 92,861 units. The category contributes over 11 per cent to overall motorcycle sales, but has strong revenue implications as product prices are 45-92 per cent higher than that of a model in the entry-level mass segment, which translates into higher margins for companies.

 “Our sales in the segment have been driven by strong demand for CB Unicorn, particularly in southern and western markets. We had back orders last year due to capacity constraints, but now with the increase in production, sales of the model have increased by nearly 90 per cent in the first seven months of the fiscal,” said Yadvinder Singh Guleria , vice-president (sales & marketing), HMSI. Till October in the current financial year, Honda sold 122,894 units of CB Unicorn, compared with 65,007 units sold in the same period last year.

“Two of our volume models, Hunk and CBZ X-Treme, were undergoing a rebranding exercise because of which we had no dispatches in August and September,” Anil Dua , senior VP (marketing & sales), Hero MotoCorp recently told Business Standard.

But a closer look at the numbers reveals HMSI had actually overtaken Hero in segment sales in May this year, and has maintained the lead since. HMSI’s market share in the segment has increased to 20 per cent (April-October 2012) from the earlier 8.9 per cent, while Hero’s has slid to 12 per cent from 19.6 per cent. Of course, Bajaj Auto with the Discover and the Pulsar, continues to remain the market leader in the category with a share of over 46 per cent.

Deepesh Rathore, managing director, IHS Automotive India, said, “Hero still relies on the Splendor and the Passion for sales, HMSI has a fresh portfolio. Earlier, HMSI had distribution issues, but that gap is narrowing now. Hero used to have a lot of repeat customers, some of whom are now opting for HMSI products because of the Honda brand. Long-term, I do see Honda overtaking Hero as the number one two-wheeler maker in India.”

Rathore’s contention is validated by the fact that even in the 110-125-cc motorcycle segment, HMSI has closed the sales gap with Hero MotoCorp to a mere 3,418 units (April-October 2012), compared to 26,542 units in the same period in the previous year. HMSI’s growth has been led by CB Shine, which saw sales increase by 54 per cent to 358,711 between April and October 2012. Guleria added, “Our growth is being driven by DNA — Demand for our products, Network expansion, and appropriate Advertising and marketing. We started the fiscal with 511 full-fledged dealerships and have added 75 outlets the last in seven months. That is the pace at which we are expanding.”

Despite sales slowing down to a moderate 4.5 per cent in the domestic two-wheeler market, HMSI has managed to clock in a growth rate of 47 per cent between April and September in FY13. The company had sold 1.53 units till October, whereas Hero reported a 1.8 per cent decline to sell 3.41 million units in the same period. To close the gap with the market leader, HMSI has targeted sales of 10 million units by 2020 and could be setting up 7-8 facilities to expand production capacity over the next few years.

Hero MotoCorp has already announced its intention to have $10 billion turnover in the next five years with sales of 10 million units.

Honda recalls 11,500 bikes to rectify faulty brakes

Two-wheeler major Honda Motorcycle & Scooter India (HMSI) on Monday recalled 11,500 units of the Standard variant of its premium motorcycle CBR250R , which were produced and sold in India, due to defective brake system.

The recall is for all CBR250R motorcycles which were produced between March 2011 and September 2012. "In accordance with its global commitment to provide maximum customer satisfaction and highest quality products, Honda Motorcycle & Scooter India is announcing the recall of CBR250R Standard variant motorcycles," HMSI said in a statement.

The company's authorised dealerships across the country started informing customers on Monday for this exercise, which will take less than an hour, it added. Elaborating on the problem, HMSI said: "There is a possibility of limited ineffectiveness in the front brake application, though this concern doesn't impact the overall braking functionality and effectiveness of the front and rear brakes under normal riding conditions."

RECALL CLUB

• Honda Motorcycle & Scooter India recalls 11 ,500 units of the Standard variant of its premium motorcycle, CBR250R
• Honda is to rectify the problem free of cost, irrespective to the warranty status of the vehicle
• The recall is the first for the Japanese auto major's two-wheeler arm in India
• Last year, Honda's erstwhile joint venture, Honda Siel Cars India (HSCI), had recalled 72,115 units of the City sedan to replace defective power window switches
• Earlier in 2011, HSCI had announced a recall of 57,853 units of the City to replace a faulty engine part, as part of a global exercise
• In January 2010, it had recalled 8,532 units of the City
• In 2007, HSCI had recalled about 4,000 units of the CR-V and 2,300 units of the luxury sedan Accord, in a move described by the company as a product update

Honda would rectify the problem free of cost, irrespective of the warranty status of the vehicle. The Standard variant of the CBR 250R is currently available at an ex-showroom price of Rs 1.48 lakh in Delhi. The recall is the first for the Japanese auto major's two-wheeler arm in India, although its passenger car division has had many such instances here in recent past. Last year, Honda's erstwhile joint venture, Honda Siel Cars India (HSCI), had recalled 72,115 units of its mid-sized sedan City to replace defective power window switches. Earlier in 2011, HSCI had announced a similar recall of 57,853 units of its third generation City to replace a faulty engine part, as part of a global exercise.

In January 2010, it had recalled 8,532 units of the City, manufactured in 2007. In the same year, HSCI had recalled about 4,000 units of the CR-V and 2,300 units of the luxury sedan Accord, in a move described by the company as product update.

This had led to a total replacement and change in design of the CR-V's fuel tank and upgrade of fuel relay in the Accord.

Hero MotoCorp to start exports to Africa, LatAm

The country’s largest two-wheeler maker, Hero MotoCorp, on Friday said it will start exporting its products to Africa and Latin America before the end of the ongoing fiscal to expand its global footprint. The company, which has started selling products under its Hero brand after the break up of the erstwhile joint venture with Hero Honda, is already selling its two-wheelers in Sri Lanka and Nepal under the new brand identity. “By the end of this fiscal year, we would have entered a few markets in Africa and Latin America,” Hero Moto-Corp Senior Vice-President (Marketing & Sales) Anil Dua told reporters here. He was speaking on the sidelines of felicitation of a bikers’ team from Indian Air Force which crossed 10 passes in the Himalayas, including four of the world’s highest motorable passes using its ‘Hero Impulse’ motorcycle. 

Bajaj Auto price target raised by 10%

We rate Bajaj Auto a ‘buy’ on strong positioning in premium bikes segment, which should structurally expand over time and early mover advantage in export markets, where the company has potential to increase penetration and market share. We also raise our price objective by 10% to R2,095, driven by upward revision of EPS forecasts by 3-5% over FY14-15e.

We expect sales mix to improve by 100-200 bps (to 25%-28%). We also expect the stock to re-rate to 15x (from 14x earlier) FY14 P/E largely on expectations of accelerated shift in demand to premium models. At our price objective, the stock would trade at 10.4x FY14e EV/ebitda. Bajaj Auto deserves to trade at a premium to historic P/E (12x) and at least at par with dominant competitor Hero (15x), mainly due to superior franchise in premium models, which is less vulnerable to competition and thereby growth more secular.

Bajaj Auto’s growth rates, both on our as well as consensus estimates are stronger than peers, especially Hero. We also believe the company is less vulnerable to competition and therefore margins, again due to premium exposure (25%), and exports (40%), lending credibility to forecasts. Although Bajaj Auto trades at premium to historic average, we believe this is not relevant as the company is different from the past, based on scale of operations, and resilience to earnings, both due to growing contribution from premium products and exposure to external markets. We believe that rising incomes and wider product choices will drive aspiration to own pricier models, thereby accelerating customer shift to premium bikes. As in past, we expect premium segment to sustain above industry growth over the next 5 years (15% vs 10%) and thereby near double proportion of bikes sold in India (from 14% to over 25%).

Bajaj auto derives 25% of sales and estimated ~30% of profit from premium Pulsar brand. We believe KTM partnership will likely enhance capability and expect the company to further leverage franchise, driven by several launches sharing common platform with KTM Duke such as 375cc offering (2013) and possibly 500cc model later. Already, 200cc Pulsar (monthly sale ~9,000 units) illustrates this success. We also expect 150cc/180cc Pulsar variants to incorporate this platform and exploit full potential of brand.

Mass & premium segments hit in two-wheeler space

October was a much-awaited month for two-wheeler companies , as demand was expected to pick up during the festive period. Especially, since there had been a slowdown in both the rural and urban markets in the first half of the year. Many companies reported retail sales of 100,000 units on the day of Dhanteras but it is best not to read much into this, as these were deliveries. Even if one discounts the festive period, one cannot rule out the volume uptick seen in October. During the month, motorcycle sales grew 5.7 per cent year-on-year (y-o-y) and 20 per cent month-on-month (m-o-m). The star of the show was the scooter segment, which grew 30 per cent y-o-y and nine per cent m-o-m.

The demand for scooters and mopeds has beaten all forecasts. This trend is expected to continue through the year, as more women are now joining the workforce and also gearless scooters have become more acceptable among men. The segment is expected to end the financial year with a y-o-y growth of 17 per cent. In the first half, scooter volumes have grown 17 per cent. Over the last few months, new launches likeHonda ’s Dio , Hero’s Maestro , TVS ’ Pep and Suzuki ’s Swish have helped push up volumes in the segment.

Interestingly, the revival in demand is not as secular for motorcycles. While demand for both premium and mass segments is down, the 110-125cc segment is growing fast. Demand in the premium segment (125-150cc) has been hit the most, declining 23 per cent between April and September. This segment accounts for 11 per cent of the total motorcycles market. The mass segment has declined three per cent in the first half and it accounts for 65 per cent of the motorcycles market. The one segment where most of the action is concentrated is the 110-125cc segment, with the launch of Suzuki’s 110cc Hayate , Honda’s 110cc Dream Yuga and Hero’s 125cc Ignitor.

Hero’s volumes have remained flat, despite launches, while Honda has seen a 70 per cent y-o-y volume growth in October. The company is planning to sell three million units of Dream Yuga in FY13. Surjit Arora of Prabhudas Lilladher says: “Honda gained market share to the tune of 440 basis points to 11.9 per cent. For year-to-date FY13, Honda’s market share improved by 450 basis points to 11.5 per cent, whereas Hero MotoCorp lost market share to the tune of 240 basis points to 52.8 per cent.” Apart from Honda, Bajaj Auto is expected to do better than Hero as exports, spares and three-wheelers are expected to account for 50 per cent of its sales by FY14.

Piaggio's top-down strategy

When Vespa returned to India, the excitement at the launch event in late April this year was understandable. After all, Piaggio Vehicles , the Italian three- and four- wheeler maker, was bringing back one of the most iconic brands in two-wheelers after a gap of 13 years.

The pricing, however, came as a surprise. At Rs 66,666, the retro-looking Vespa became the most expensive scooter in India. It is 32 per cent costlier than theHonda Activa , India’s largest-selling scooter.
The question was will it be able to survive in a fiercely competitive Indian market where much has changed in the intervening 13 years? The sales figures have not been encouraging: At 18,000 units till October, Vespa, a Hollywood hot favourite, commands a share of a little over one per cent of the domestic scooter market , which saw cumulative sales of over 1.7 million units till last month.

That may mean a lacklustre performance, but Piaggio executives at the company’s headquarters in Pune insist that Vespa is “the iPhone of the scooter market” and it’s still early days. What they are happy about is the right levels of excitement that Vespa has generated.

Ravi Chopra , chairman and managing director, Piaggio Vehicles says, “Our strategy was very clear. We wanted to create a premium space in the scooter category, which till now did not exist. The Vespa meets the needs of the youth who wish to indulge in luxury but do not have a product to buy.”

Chopra is correct. India saw over 2.5 million scooter sales in the last financial year posting a growth of 25 per cent over the previous year. However, unlike motorcycles with multiple sub-segments, scooters sell in a narrow price band with most available for under Rs 52,000.

Presently scooters do not have a niche brand in India, while motorcycles offer a wide variety of products above Rs 1 lakh. In a market where scooters typically score high on their utility purpose (such as carrying load) than on its aspirational value, Piaggio seems to heading in the opposite direction with Vespa, thus trying to create a niche brand albeit on lower volumes.

“Trying to create a premium segment is not easy, one has to be patient. Sometime segments are created over 10-15 years and sometimes it gets created in 10-15 months. It took Bajaj 10 years to create the Pulsar in the premium segment. When you are catering to a niche luxury segment, you have to be satisfied with a lower volume growth”, adds Chopra.

The slow ramp-up and limited retail reach of the dealers (the company is yet to tap the eastern part of the India) has also led to lower volumes of the Vespa.

However, it would be wrong to assume that the company has kept the volumes of the Vespa artificially low to maintain its exclusivity. Piaggio is, in fact, in a production ramp-up mode at its plant in Baramati, Maharashtra.

“We have a major expansion plan. We have appointed 55 handpicked Vespa dealers. The experience a buyer gets in a Vespa dealership is the same he would get in a boutique. If I were a mass market manufacturer of this product, I would be selling 25,000 Vespas a month, but that would not do any good to the product”, adds Chopra.

The Honda Activa sells around 80,000-100,000 units a month while the Hero Motocorp duo of Pleasure and Maestro sell in excess of 55,000 units a month, as per company data. Honda Motorcycle and Scooter India is the leader in the scooter segment with a share of 50 per cent.

Life beyond Vespa Piaggio, however, is also looking at life beyond Vespa. The Indian market will see the launch of an affordable range of mass market scooters from the Italian company next year, and the new range will not be under the Vespa brand. Variants of the Vespa scooter is also scheduled to hit markets next year.

Piaggio knows it’s a relatively unknown brand in the two-wheeler space competing with the likes of Honda, Suzuki, Hero and Yamaha, and needed to generate some excitement first. That’s where the Vespa comes in. It’s a top-down approach: while the Vespa will remain the centrestage brand, cheaper products will follow after the company gets into the consumers’ mindspace.

“The company cannot do business with just one product and therefore we are very seriously contemplating add-on products. It is from these products that we will be seeking large volumes. The Vespa will remain a premium product”, elaborates Chopra.

Competition though is not losing sleep as everyone knows the headroom for scooter growth in India is tremendous. More than 62 per cent of the domestic scooter market is dominated by the Japanese brands - Honda, Suzuki and Yamaha.

“Piaggio’s entry won’t dent the market share of anybody but will bring in additional volumes”, says a senior executive of a Delhi-based manufacturer.

A resurrection? TVS Phoenix review

When I first read about Fawkes the Phoenix, Albus Dumbledore’s animal companion (I refuse to call Fawkes a ‘pet’), I was fascinated by the mythical creature’s magical powers. It could mend injuries by shedding tears over the cuts, burst into flames and be born again from the ashes, give feathers of its tail to be made into magic wands.

But then for me, the best ‘feature’ of this creature was that it could carry immensely heavy loads over long distances when all other modes of transport failed. That, to me, is an awesome way to commute. Just grab the bird’s tail, flash, and you’re gone – no gridlocks, no honking, no refuelling, nothing. Ah, if only!

So getting back to commuting, or rather commuters, I got to check out TVS’s new 125cc ‘executive commuter’, the Phoenix. Much can be said about the name itself -Flame, the last 125cc commuter, well, er…flamed out. And I can’t help but be dramatic, by saying that the Phoenix has been born again from the ashes.

But, really, has it? Because the competition, the Honda Shine has the segment in its clutches. Does the Phoenix have anything magical about it to pose a threat to the likes of the Shine, Hero Ignitor (also Honda Stunner) and Bajaj Discover 125? To find out, I landed up at TVS’s Hosur factory on a rainy day to ride the hatchling, sorry, bike, on the company track. I wanted to ride the bike on city streets, though, for that’s where it actually belongs.

Styling and build

At first glance, the red Phoenix that I rode looks like Hero MotoCorp’s Passion Pro, because of the graphics. The decals run all the way from the broad, bikini faring to the tail, which, in my opinion, is a slight overdose of stickering. A huge ‘125’ sticker plastered on the tank loudly announces the engine capacity.

But overall, the graphics add a certain sense of appeal to the bike, for without them the Phoenix would’ve looked a little skinny. The front fender comes in a dual-colour scheme (body colour and black) and has some decals on it too. The rear mud-guard, engine, chain-guard and the 17-inch, six-spoke alloy wheels, all come in matte black. The grab rail and parts of the side panels come in metallic grey.

The headlamp comes with twin LED pilot lights which add an Apache-like touch to the styling, and even the tail-lamp is quite big and noticeable. As a safety feature and a first in Indian bikes, TVS has added hazard lamps to the Phoenix. While this might be considered a good safety feature for riding in foggy and dark conditions, I don’t really see a good use of this in main city traffic unless the rider is in the logistics or delivery business where frequent stops along the road-sides have to be made. The hazard light switch is placed and looks just like an engine-kill switch and had me confused for some time.

Another Apache-like feature is the 240mm front petal disc on the disc brake version. The speedometer console is an amber-backlit all digital one, with a service reminder, digital odometer/tripmeter, low battery reminder and digital fuel gauge. The switches look quite premium for the segment, and have crisp responses to soft touches.

Performance

The Phoenix runs on a single-cylinder, air-cooled, 124.5cc four-stroke engine, which TVS claims to be a new one. This motor churns out pretty decent numbers for its segment - 10.85bhp at 8000rpm, and a peak torque of 10.8Nm at 6000rpm. As this bike intended to be in the commuter segment, it has good low and mid range power delivery, but I found it to be lacking in muscle for longer, more open stretches of tarmac.

The carburetted ‘Ecothrust’ engine is married to a four-speed, all-up gearbox, which registers the gears quite smoothly. The clutch also feels very light and comfortable, and this might be very good for riding in heavy traffic for long periods. I am assuming that the slightly smallish 1265mm wheelbase would also be quite good to weave in and out of traffic.

Although I agree that ‘city-riding’ conditions require a bike to have a short gearing system like the Phoenix has, and should offer good low range power delivery, I also feel that the near-perfect commuter should turn out better numbers on highways too. In many metros and large cities, professionals live up to 20 kilometres (or more) away from their work places. Many of them use public or company transport to commute, but those who prefer to ride (the ‘executive commuters’) to work, often pass through toll roads and highways. On roads like these, one would really love to have a fifth cog and a bike that pushes beyond 80-85 kmph without any roughness setting in.

The Phoenix’s digital speedo went past 90 kmph only after I pushed it very, very hard (struggled would be the right word) on the track and the old TVS problem with vibration and roughness could be felt a bit after the 80kmph mark. As the bike has a lower kerb weight (114kg for drum and 116kg for disc), it doesn’t feel reassuringly steady on higher speeds.

TVS claims that the Phoenix can deliver 67 kilometres to the litre under standard riding conditions, which can be a good incentive to buy this executive commuter.

Riding comfort

Cornering capability of the Phoenix is quite decent, with a good grip around the loops and curves on the track. Even when the track was quite wet, the Phoenix was quite sure-footed on the gradients and on a loop that would tempt any rider to lean deep into. The real test for this motorcycle would have been in city traffic, where cornering can be unpredictable.

Braking, too, was quite good. I got to ride the bike when the track was both wet and dry, and I was quite happy to see that rapid deceleration on straights and controlled braking around the curves were quite stable. Even when I locked up the rear 130mm drum brake on the wet straights, the rear didn’t step out, contrary to my expectations.

One thing that is new to this segment, and which TVS has incorporated on the Phoenix, is the inclusion of a ‘series spring’ on the 5-step adjustable rear hydraulic shocks. The ‘series springs’ are basically two springs of different number of coils and tension/extension ratings, for providing different types of compression of shocks on different terrains. Also, the Phoenix sports 90/90 tyres, which are on the wider side for the 125cc executive commuter segment and claim to offer more comfort on bad roads.

To test this, I rode the bike over an ‘urban simulation’ track with potholes, rough tarmac, bumps and breakers, and I can say the Phoenix passed the test. But then again, ‘urban simulation’ is not really the actual thing.

Overall, with a comfortable seat and improved upholstery, the Phoenix offers a very comfortable ride and I am guessing it wouldn’t be very tiring to ride this bike for up to an hour or two in heavy traffic.

Bottomline

Clearly, the Phoenix is a much better ride than the older Flame, with an engine that is not as rough and has a good ride quality. It is also packed with features that are not present on other bikes in its segment. But somehow, I don’t quite see it being an imminent threat to the Honda Shine or Bajaj’s Discover 125, for it still does not give enough reason or any compelling factor that would make it more appealing than the competitors. The mileage might be an inviting factor, but only to an extent. The Phoenix is offered in five dual-tone colours, in two variants. The ex-showroom (Chennai) price for the drum variant is Rs 51,000 and Rs 53,000 for the disc version.

Bajaj Auto leads auto stocks rally

Though the high interest rates still prove to be worrisome, the auto sector seems to be riding it out with the positive mood rubbing on select auto stocks as well.

What gave a further boost to the investor enthusiasm in the auto counters was the robust October numbers.

With Rajiv Bajaj, MD, Bajaj Auto Ltd (BAL), announcing on Friday that the October sales were “the second best month ever in our history,” the stock hit its lifetime high of Rs 1.906 on the NSE before closing at Rs 1,896.85. .

M&M was the other star performer recording its all-time high at Rs 921.

Maruti Suzuki shares also recorded a new 52-week high but as the stock had rallied much in recent weeks, it was relatively muted today.
Record sales

Rajiv Bajaj, in a TV interview on Friday, said: “We were looking for some positive signs from the domestic market and we saw them in the last month,” despite concerns over high interest rates. The total sales that included exports, of two and three wheelers, of BAL was 4.11 lakh units in OctoberBajaj Hero MotoCorp was another stock to sizzle, gaining Rs 33.95 to close at Rs 1,943.95. The investor sentiment in this stock too was fuelled by its last month sales of close to 5.30 lakh units.

Eicher Motors was also in the limelight gaining Rs 39.20 to close at Rs 2,390, marginally lower than its 52-week high of Rs 2,405 that it touched on October 25.

The three auto stocks that did not contribute much to rally were Maruti, TVS Motor and Tata Motors. Maruti’ shares which have already rallied in recent weeks touched a new 52-week high of Rs 1,477.35 but closed a little lower at Rs 1,464.55, a gain of just Rs 4.80. TVS Motor shares closed unchanged at Rs 38.75 and Tata Motors, which saw its October car sales decline compared to Oct 2011, edged up marginally by Rs 2.90 to Rs 270.35.

Research house IDBI Capital expects dispatches to remain healthy in November as well on account of festive season but feel weak volume trend may return later for the sector barring UVs and SCVs.

MoUs to bring in Rs. 20,925 crore investments to state

MoUs to bring in Rs. 20,925 crore investments to state.

The government will sign memorandums of understanding (MoU) for 12 projects involving total investments worth Rs 20,925 crore, Chief Minister Jayalalithaa told the Assembly on Thursday.

MoUs bring investments (PDF)

The MoUs, to be signed on November 5, are expected to generate direct employment for 36,855 persons and indirect employment opportunities for one lakh people, the Chief Minister said while making a suo motu statement in the House.

“I take pride in saying that these agreements will go down in the industrial history of Tamil Nadu for bringing in the highest quantum of investment on a single day,” she said.

The nod for signing MoUs with seven companies was given in the Cabinet meeting on May 14.

Again on October 27, it was decided to sign MOUs with another five companies.

‘Vision-2023’

Ms. Jayalalithaa said these MoUs would translate into reality the ‘Vision-2023’ unveiled by her government on March 22.

“The objective is to achieve 20 per cent more growth than what is expected at the national level or 11 per cent annual growth,” she said.

The first set of seven MoUs are a joint-venture for fibre glass and float glass manufacturing units with an investment of Rs. 4,100 crore at Thervoy Kandigai by the US-based PPG and Harsh Group, Rs. 700 crore projects in Chennai, Hosur and Oragadam by the TVS group for manufacturing spare parts, rubber and plastic components, a Rs. 500 crore project by the Murugappa Group at Tiruvallur and Kancheepuram districts for manufacturing scooter and bicycle components and iron pipes, a Rs. 500 crore project by Denmark-based Danfoss at Oragadam, a Rs. 250 crore project by Sanmia-SCI at Oragadam, Rs. 250 project by Nokia at Sriperumbudur and a Rs. 300 crore project by the US-based Alticor Inc at Nilakottai in Dindigul district for manufacturing home appliances.

Another five MoUs are for expansion of the Hyundai car factory in Irungattukottai at a cost of Rs. 4,000 crore, a new synthetic factory by Indo Rama at a cost of Rs. 4,500 crore, a joint venture by BGR Energy Group and Hitachi at a cost of Rs. 2,325 crore to manufacture turbines, generators and boilers, a Rs. 3,100 crore project by ADD Industrial Park at Annur in Coimbatore and expansion of Saint Gobain at Sriperumbudur and Perundurai at a cost of Rs. 400 crore.

The Chief Minister said the Synthetic Fibre factory by Indo Rama at Ennore and Coimbatore would be the first petro-chemical factory in the State.

The textile park by ADD Industrial Park to be set up in Coimbatore on 2,200 acres will provide employment for 2000 persons in the beginning and the figure will reach 25,000 in seven years.

Singh is King in Indian Auto Business

Gurpratap Boparai remembers washing his father’s car and checking its fluid levels and tyre pressure way back in the mid-70s in the winter wonderlands of Moscow. His father, an IAS officer who was commercial counsellor in the commerce ministry in the Russian capital, would delight the then six-year-old Boparai with details about car engines and cylinders.

Those early experiences with cars set the tone for Boparai’s romance with the industry. The man who once traversed the 920-odd km between London and Turin in a day began his career in automobiles in the early 1990s with Tata Motors, then primarily a maker of trucks and known as Tata Engineering & Locomotive Company.

Boparai is one among several head honchos whose passion for cars has shaped their career path. Boparai is also a Sikh, a community known for its close relationship with vehicles of all shapes and sizes as well as the components that go into them. “There is a strong bond between Sikhs and all things mechanical, in general, and automobiles in particular,” points out Boparai. Call them the sardars of the auto world — or even the sons of sardars, given the previous generations’ dalliance with all things on wheels: Other than Boparai who was recently anointed CEO of Fiat India, there’s Joginder Singh, Ford India’s managing director who takes over as president & MD of Ford India from December 1; other Sikhs at top positions at automakers include Sandeep Singh, deputy MD, Toyota Kirloskar; Ravi Chopra, MD, Piaggio India; AS Puri, vice-president, Tata Motors; HS Goindi, president, marketing, TVS Motors; and Harbhajan Singh, head, industrial relations, Honda Motorcycle & Scooter India. Hormazd Sorabjee, editor, Autocar India, sums up the reason for the preponderance of the turbaned generals at automakers. “Sardars have an entrepreneurial instinct, can multi-task and think on their feet.”

A Sikh who heads a southbased auto company but did not want to come on record attributes the conspicuous presence of the community to its association over the decades with the transport and spare parts business. Over time, many of these sardars have evolved into experts in automobiles and are natural leaders at companies that make them.

“The past association of previous generations has helped us develop a good understanding of the automobile business. As a community, we are more realistic, transparent, willing to take up operational roles, easily adaptable and willing to travel,” is how this CEO puts it. Ravi Chopra, an auto veteran who has been associated with the industry since 1997, says it may be just coincidence that there are so many Sikhs in key positions in the auto industry. “Sikhs across the world do occupy key prominent positions,” says Chopra, MD of Piaggio India.

“By nature, Sikhs are hard working, industrious, committed and enterprising, all key attributes needed in a leader,” he says. Sikhs have also built formidable dealership businesses all over the country.
Ludhiana-based Raj Naresh Singh has been a dealer for the past 15 years; today he owns dealerships for passenger vehicles of Ford, Volkswagen, Volvo and Nissan.

Santosh relishing Raid victory

It is so cold in some places up there in the Himalayas that you will wish you were never there. To be around for any normal person is tough enough, but to race in the bitter cold is something else.

CS Santosh, a multiple National supercross champion, had his first experience of something so extreme in this year’s Raid de Himalaya. Winning the Xtreme two-wheeler class was the icing on the cake.

Many a competitor would be thrilled about winning, but for Santosh the experience is important and what he had to endure makes the win sweeter. “It was painful,” he exclaimed. “I was able to enjoy the beautiful surroundings only in bits and pieces. The climate is so extreme. But when you come back home and sleep, you will know that you have done something. I have never felt this sense of accomplishment.

“At the first corner of the first stage, there is a 1Km drop. I saw it and my heart was in my mouth. For six days, it was about life and death. I have never seen anything like it,” is how he sums up the experience.
There are a lot of drivers and riders who will feel like getting out of the place when they are competing. Early morning starts, even before dawn, is the norm. Rough and slippery stages mean that you will plummet to death if you make one false move or brake in the wrong areas. That is what makes the event so challenging and makes people go back again. “There are people who have gone back to the Raid eight or nine times. I was thinking to myself, ‘Are they crazy?’. But now, after seeing it, I definitely want to go back,” he remarked.

Santosh has competed in the K-1000 way back in 2003 but crashed out in the very first stage. After that he took up racing in supercross and motocross. This year’s Raid meant he was back in rallying after a long time. The experience was an eye-opener. “Rallying is not for me but you are never a complete driver/ rider until you have driven in the Raid,” he remarked.

Also, skill is one thing. But having a good machine is invaluable because a lot of power and torque are needed to get the bike out of slushy areas. “I used a Honda CRF450. The stages were superb, tight and twisty. I was awestruck. The bike held up well and I was able to achieve speeds of 160-170Kmph,” he explained.

The Raid is one of the off-road rallies listed by the International Motorcycle Federation (FIM) and Santosh wants more of this adventure now. “I rode (in motocross/ supercross) in Sri Lanka and skipped the Indian championship. I want to continue to do it but not too much. I want to concentrate on rallying, maybe even try cross country and events like the World Cross Country Championship next year,” he said.

While he admitted that it would be hard to find sponsorship, he will nevertheless try his best. Santosh is also aiming to do well in the Desert Storm early next year. But as of now, back in the comfort of his hometown, he can look back at the Raid and feel a sense of achievement.

Hope to gain market share when we have complete portfolio

TVS Motor hopes to post better performance and increase share in the coming quarters. For the quarter ended September, the firm’s net profit fell 41 per cent to Rs 45 crore as against Rs 77 crore in the same period previous year. Its profit from operations before other income, finance cost and other items also fell 37 per cent to Rs 69 crore from Rs 109 crore. K N Radhakrishnan told G Balachandar that company’s festival sales so far have been encouraging. Excerpts:

What were the major reasons for drop in margins and profit in Q2?

The overall economic scenario has been weak. Industry in Q2 of 2012-13 declined by five per cent compared with growth of 19 per cent in Q2 of last year and nine per cent growth of Q1 of the current year. Lower sales during the second quarter has resulted in lower margins and profit. Additionally, the company has invested significantly in building its various brands.

When will the formal roll out of Phoenix happen?

As mentioned during the launch, we will start supplies of TVS Phoenix from November onwards and by December-end TVS Pho­enix should be available across the country.

Do you see some festive boost to your sales?

Festival sales have been encouraging. We have grown around 10 per cent when compared strictly with the previous year’s festival season. However, we need to watch how things will pan out during Dantheras and Diwali.

Overall, how do you see the second half for your company and two-wheeler industry?

We expect the second half of the financial year to be better given that we will have a complete product portfolio with the introduction of TVS Phoenix, which will complement our existing brands. The industry is expected to grow about five-six per cent as against the earlier estimate of 9–11 per cent. This is mainly due to inflationary pressures, high interest rate and rising fuel prices. With a complete product portfolio, we expect to gain market share in the second half.

Bullet vrooms, makes a Royal comeback

Not too long ago when people heard and saw the loud, thumping 'Bullet' on the road, they were rest assured that it was either an army or police officer or simply the 'macho ' in town riding in with authority . But not anymore. The new generation is increasingly falling in love with the motorbike's retro style.

So how did the Bullet vroom back into the spotlight?

Says Bullet buff Satish Bopanna, who works for a public sector company: "Earlier , the bike was so heavy that it needed a person with big built and mechanical skills to kickstart and manoeuvre it on the road, especially when stuck in traffic. But that's no longer the case." Bopanna owns a Classic 350.

Makers Royal Enfield, according to him, tasted much success after they developed elegant and modish lighter machines with a right-side footed brake pedal and gearshift with left side, besides an easy self-start .

This makeover turned the tide in favour of the 119-yearold company, which was on the brink of bankruptcy a decade ago. It has been swiftly selling its new avatars in Karnataka in the past two years on the strength of its new wider handlebars design, refurbished engines, mileage and reducing emissions.

Gen Y is only too happy with this. "Earlier, I used to hate the machine because it was too heavy and difficult to handle. I was happy riding Japanese bikes for 10 years, but recently got to ride the new Thunderbird 350. I fell in love with it and now proudly own one," says Vasudev Prasad, a bank executive.

For many enthusiasts, owning one was no easy ride either. "I grew up hoping to own a Bullet but could afford one only when I reached 40, when I recently bought the Classic 500," says Avinash Sarathy, who runs a food outlet at RT Nagar.

The girls love them too. N Gowri, a longtime Royal Enfield enthusiast, is a proud owner of 2010 model STD 350: "I just love riding this bike. When I was in college I use to ride my father's old Enfield which has left gear shift. With the new one, it took time to adjust to the right foot gear shift, but I was amazed by its performance and lighter weight," she says.

Company officials, too, vouch for it. "From an average monthly sale of 257 bikes in 2010, Royal Enfield volumes in Karnataka have shot to 883 till September this year," says Shaji Koshy, senior VP. The newly launched Thunderbird 500 and upcoming Cafe Racer (legend model) are expected to further boost the Enfield market in India.

Making of an icon

Royal Enfield originally built motorcycles to be parachuted into enemy territory by British forces during the Second World War. The classic styling and trademark thumping of its engine at full throttle drew lot of fans worldwide.

It rolled out its first motorized bike in 1901 and entered the Indian market in 1949. When Royal Enfield stopped making bikes in Britain in 1970, India's Eicher Motors bought it in 1994.

GenNext's love for Scooters puts auto cos on Fast Track

Scooters have defied a slowdown in the Indian market. One of the smallest segments in two wheelers, its robust growth has given a fresh impetus to twowheeler companies.

Scooter sales in the domestic market grew 21% in the first six months of the fiscal even as motorcycles declined 0.79%.

The strong demand, boosted by the growing urban infrastructure and rising number of women owning scooters, has encouraged companies to hike capacities to tap this growth which has been rare across the Indian automotive market.

“We are adding 10,000 scooters to take our monthly capacity to 40,000 by March next year. We have seen consistent expansion in the past two years where demand has simply outstripped out capacities,” says Atul Gupta, marketing head, Suzuki Motorcycle Private. Companies have lined up an investment of . 500-600 crore this year to take the cumulative scooter production beyond the 30-lakh mark due to a backlog of order bookings. According to scooter manufacturers, while most bikes are currently available off the shelf, scooter models command a two-to-four months of waiting in selective markets.

Leading the way is Honda Motors that is credited for reviving the scooter market in India with its Activa way back in 2001 — even as erstwhile market leader like Bajaj Auto’s presence in scooters gradually faded — is now returning to the segment with some fresh plans to rejuvenate its presence in the scooter segment.
Its Indian subsidiary HMSI is working on plans to develop high-power scooters besides strong focus by refreshing its flagship brands like 110-cc Activa and Dio to maintain its lead. “We changed the perception about scooters in India. Our current range of automatic scooters enjoys tremendous consumer confidence as a complete family vehicle with delivering high-fuel efficiency without compromising styling. With a consistently expanding demand we expect to cater to the Indian demand as we gradually ramp up production in our third plant coming in Karnataka next year,” said YS Guleria. Vice-president (sales & marketing) HMSI.

    Two-wheeler companies are most bullish on the scooter potential in the Indian market and is expected to grow from the current 20% to 35% by 2016, when the Indian two-wheeler market is expected to double to 20 million units. Scooters have caught the fancy of new age customers. Besides, the growing base of women customer’s, scooters with automatic transmission and multi-purpose use are generating stronger demand in smaller places. “Scooter sales are spread across states or hinterland markets. While demand is higher in urban areas, the semi-rural markets are also spurring growth in recent times,” Guleria added.

Hero MotoCorp enjoys the second-biggest chunk of the scooter market, following the success of its newly-launched Maestro. The company, which has a full-year capex of . 350 crore for its entire operations this year, has planned to hike its monthly production to over 60,000 units at its Gurgaon plant.

“Even as bike sales have slowed, scooters are keeping us busy and generating a huge latent demand to keep our expansion plans intact. With an average sales crossing 50,000 units last month, we are scaling up our scooter capacity to over 60,000 units a month from about 40,000 units about a year back,” said Anil Dua, senior vice-president (marketing & sales) HMCL, said at an analyst call last week.

The demand, which stayed ahead of production in the past two years, has promoted new players like India Yamaha Motor, Italian Piaggio and Global Auto to foray into the segment. “We are looking at an overall market share of 10-15% market in the scooter segment by 2016 with the success of the RAY scooter which is targeting young urban women,” said Jun Nakata, director (sales & marketing) India, Yamaha Motor.

TVS Motor post 41% dip in Q2 PAT at Rs.45 cr

Two and three-wheeler manufacturer TVS Motor Company has reported over 41 per cent decline in its Profit After Tax for the second quarter ending September 30, 2012.

The Chennai-based company registered PAT at Rs 45 crore for the July-September quarter, down by 41.5 per cent, from Rs 77 crore registered during the same period last year.

The group revenues dipped 15 per cent to Rs 1,691 crore, during the quarter, as against Rs 1,991 crore registered during the same period of last year.

Sales of motorcycles declined to 1.67 lakh units for the second quarter of the 2012-13 fiscal, as against 2.41 lakh units registered in the comparable period last year.

The company also witnessed a decline in sales of scooters at 1.19 lakh units for the quarter, from 1.59 lakh units registered during the same period of last year.

On the exports front too, the company reported a slump in sales at 0.48 lakh units in the quarter, as against 0.76 lakh units during the corresponding period last year.

However, the company said sales of three-wheelers grew to 12,213 units during the period ending September 30, 2012 from 11,699 units sold during the same period of last year.

The company, in a statement, attributed lower sales to overall sentiment of the industry, which witnessed a decline in growth to five per cent in the second quarter from a growth of 19 per cent in the same period of previous year.

"Between April and September of the current financial year, the industry declined to a growth of a mere two per cent when compared to 19 per cent in the same period of previous year," it said.

A weak economic scenario, high inflation, rising fuel prices, high interest rates and poor monsoon in South India affected sales, it added.

However, retail sales for the festival season in the October 2012 have been encouraging, the statement added.

Strong Oct sales put automakers in High gear

Deep discounts and a flurry of new launches have pushed up passenger vehicle sales in the festive season, with 10 leading auto makers together posting a growth of 36 per cent to sell 222,168 units last month.

Industry sales were propped up by market leader Maruti Suzuki India Limited (MSIL), which increased volumes by 87 per cent to sell 96,002 units in October. The company posted a growth of 69 per cent in its bread-and-butter entry-level small car segment at 42,233 units. The segment had seen sales languishing for the major part of this year due to waning demand for petrol cars. Petrol vehicle sales declined by 20 per cent during the April-September period of this year.

Mayank Pareek, chief operating officer (sales & marketing), MSIL, said: “We are enthused by the response to the new Alto, which has received over 32,000 bookings. The initial signs during the festive season have been very good for the company, with fresh bookings going up by 18 per cent.”

FESTIVE RIDE

Deep discounts and model launches pushed up passenger vehicle sales last month with 10 of India’s leading automakers together selling 222,168 units

Maruti Suzuki India, the country's largest carmaker, said its October sales grew at a record 86.6%, buoyed by strong demand for the new version of the Alto and a low comparison base

Sales traditionally rise in India during the festival season

Mahindra & Mahindra, India's top SUV maker, posted its highest-ever monthly sales volume in October thanks to demand for its XUV500, Quanto and Scorpio models

CAR SALES

Company October'11  October'12  % Growth
Maruti Suzuki  51,458 96,002 86.6
Hyundai Motor  33,001 35,778 8.0
Tata Motors  25,124 21,119 -16.0
M&M 18,756 26,932 43.6
Honda Cars India  5,526 8,085 46.0
Toyota  10,762 12,281 14.0
Ford   8,091 7,577 -6.4
General Motors  10,062 6,754 -32.9
Audi  482 850 76.0
Renault  173 6,790 3825.0
Total    1,163,435 222,168 35.9

Domestic sales  only      
                                                   
        Source : industry

Although the growth at MSIL has come on a low base (the company had suffered major disruptions in production due to labour unrest at its Manesar facility in October 2011), Pareek is confident that the company would perform better in the coming quarters.

“We have an order backlog of 125,000 units for the Swift, DZire and Ertiga. Overall, the passenger vehicle industry has grown by 6.9 per cent in the first two quarters. We expect the second half to be much better given that all the major festivals and corporate and pre-budget purchases will happen now,” said Pareek.

Festivals of Navratri and Dussehra spruced volumes

New launches by Yamaha, Honda and Suzuki helped bring added volumes

Models such as Ray, Dream Yuga and Hayate built sales

Hero MotoCorp which was struggling with high inventory got back to over 5 lakh volume

Hero claimed that its dealers sold over 3.50 lakh units of two-wheelers in just the first 15 days of the festive period

TWO-WHEELERS

Company October'11 October'12 % Growth

Hero MotoCorp  512,238* 529,215* 3.3

TVS Motors  159,887 170,273 6.49

Yamaha  38,229 39,368 2.97

Suzuki  11,513* 36,206* 214.47

Honda  178,181* 250,606* 40.64

Total  900,048 1,025,668 13.95

*Includes exports        
                                                                                                                              Source:- Companies
After reporting a 14 per cent decline in sales in September this year, Korean auto major Hyundai Motor India Limited (HMIL), grew volumes by eight per cent to sell 35,778 units in the domestic market. Rakesh Srivastava, vice-president (marketing & sales), said: “The festivals brought in positive growth in domestic sales with resurgence in petrol variants. All models showed a growth especially with strong demand of Eon and Elantra.”

Homegrown auto major Mahindra & Mahindra (M&M) and French carmaker Renault India reported their best ever monthly sales on the back of demand for utility vehicles. While M&M saw strong demand for the newly-launched compact sports utility vehicle Quanto, the XUV500 and Scorpio, nearly 80 per cent of Renault’s sales came from the Duster which saw an off-take of 5,406 units last month.

Despite the spike in sales, company executives and industry observers are cautious. “In the coming months, the challenge would be to convert customer interest into sales as the general inflationary trend, high fuel prices and interest rates are still keeping the customer sentiment low,” said Srivastava.

Tata Motors, in fact, failed to cash in on the festive demand in October, with sales plunging by 16 per cent to 21,119 units. US-based auto majors Ford and General Motors — both did not have any new model launches in recent months — followed suit and reported a dip in demand for vehicles.

“We have not had any new model launch this year. With the Sail coming in tomorrow, we are expecting the sales to go up”, said P Balendran, vice-president, (corporate affairs), GM India. Sales at the company declined by a third to 6,754 units last month.

Shares of Maruti Suzuki were trading at Rs 1,455.2 a piece, up 1.3 per cent at close at the Bombay Stock Exchange. The M&M stock on Thursday touched a new high of Rs 903.50, to close at Rs 898.90.

Bajaj Auto Oct sales up 4%

Bajaj Auto Ltd. said  that its total vehicle sales was up by 4% in October to 411,502 units, with exports down 4% 126.091 units.

Commercial Vehicle (CV) sales was up 14% at 50,316 units in the month under review.
Total motorcycle sales for the month surges 3% at 361,186 units.