Triumph Motorcycles aims to win over young Indians.

Britain’s Triumph Motorcycles will start selling its iconic bikes in India on Thursday as it seeks to capture the hearts of wealthy motor heads who ride for passion not function.

Privately held Triumph is following high-end motorcycle makers such as HarleyDavidson and Volkswagen’s Ducati in entering a market where quick-rising wealth is leading to greater demand for expensive toys.

“The best combination on the road is the bike and the road they are the only two people who can talk to each other. I think that culture is coming up in India,” Triumph India managing director Vimal Sumbly said.

Triumph not only has to win over customers, but also has to persuade people to buy touring bikes in a coun
try notorious for poor roads.

Its track record for infrastructure development is miserable compared with China and most other emerging economies, and its failure on this score has sapped growth.

Most Indians commute using motorcycles or scooters and it is common to see families of four or five on a single vehicle snaking through heavy traffic or
even over pavements escaping jams. As the economy slows, two-wheelers comprise the only category of the auto industry to register growth this year.

Sales of powerful bikes, including those from Harley and Eicher Motors’ Royal Enfield, have doubled over the last fiscal year. Industry watchers say strong growth is likely to continue in the medium term. 

The Power of two.

A helicopter pilot who loves to fly—on the road. Giving 29-year-old Delhi resident Rohan Arora the wings is Brutus aka Harley Davidson 883 XL. But even before Brutus, named after Arora’s beloved dog who died, rode into his life, three generations of Arora’s family have been proud owners of Royal Enfields, the ultimate Indian mean machine. As Arora puts it, “I love the thump of the engine. Besides, the bike is perfect for comfortable cruising.”

INDIA’S FIRST CHOICE

Whether it’s the thump, the pricing, safety, fuel-efficiency or comfort, India’s love affair with motorbikes has never been stronger. Of all the sectors that have registered growth in India over the last two decades, the story has been particularly spectacular for the more than `10,000 crore two-wheeler segment. So much so that India now stands next to China and Japan in terms of production and sales. Ease of commuting, the variety, latest technology and enhanced mileage have only added to their popularity.

Despite an overall economic slump, the Indian two-wheeler industry registered a 1.04 per cent growth in April-May 2013 compared to the same period last year. Hero MotorCorp, the biggest two-wheeler manufacturer in the country, sold more

INDIA’S FIRST CHOICE

Whether it’s the thump, the pricing, safety, fuel-efficiency or comfort, India’s love affair with motorbikes has never been stronger. Of all the sectors that have registered growth in India over the last two decades, the story has been particularly spectacular for the more than `10,000 crore two-wheeler segment. So much so that India now stands next to China and Japan in terms of production and sales. Ease of commuting, the variety, latest technology and enhanced mileage have only added to their popularity.

 Despite an overall economic slump, the Indian two-wheeler industry registered a 1.04 per cent growth in April-May 2013 compared to the same period last year. Hero MotorCorp, the biggest two-wheeler manufacturer in the country, sold more than a million units during the same period.

 Says Pawan Munjal, MD and CEO of Hero MotoCorp, “We have crossed the landmark 6 lakh unit sales for October. As despatches are still continuing, the final tally for the month will be well over 6 lakh. This is our highest-ever despatch sales for any month and indeed, a new industry benchmark. While the economy is going through a challenging time and the industry continues to be sluggish, I remain optimistic about the two-wheeler industry. We have had a normal monsoon this year and that is likely to result in good harvest across the country, which will help two-wheeler sales in rural areas.”

The picture only gets better. According to the Society of Indian Automobile Manufacturers (SIAM), the Indian two-wheeler industry is expected to post an annual growth of 11-12 per cent, and the market is expected to double every four years till 2020.

 For 29-year-old Sagar Neil Banerjee, a social media supervisor with WebChutney’s, the tryst with bikes started when he unabashedly stole his father’s Hero Honda CD100 from the garage and took it for a spin. The reprimand that followed failed to shame Banerjee as he went on to steal it over and over again. The curiosity and excitement only increased over the years and Banerjee made bikes his primary vehicle. Most recently, he got himself a Royal Enfield Thunderbird. “This would be my fifth bike, two of which are with me in Delhi and the other three are in my hometown, Purulia, a small town in West Bengal, (and yes, I don’t sell my bikes),” says the enthusiast.

His relationship with them is uncannily emotional. They are not ‘just’ vehicles for this young adult. “It’s a feeling only bikers would understand. It’s so strong that you often feel as though your bike responds to your emotions. I share a very unique connection, as if there is an untold pact between us. They have never left me stranded,” says Banerjee.

The story is similar for PR professional Aman Singh Madaan (25). He takes his Royal Enfield Electra 4S for a spin every day, and is very choosy about who gets to ride pillion. The pleasure in his voice is unmistakable when he describes taking his bike to his ancestral village in Punjab Khor. Wearing an off-white kurta, brown leather juttis and Rayban aviators, he entered the premises of his house with the bike’s signature dhuk dhuk dhuk announcing his entry. The experience, he says, was out of the world. An experience that one can get only on a Bullet. His father, who waited for his arrival was elated to see his son’s shaan ki savari. Madaan bought the silver beauty with his first salary in 2009 and the first time he rode it, he knew it was for keeps. “The registration number is the same as my year of birth. My family and friends call it Bullet 1988,” he says.

Playing a significant role in the sale of bikes has been the recent hikes in petrol prices. According to SIAM, most first-time four-wheeler buyers in rural India and tier II and tier III cities have deferred their purchases. Two-wheelers account for a whopping 76 per cent of market share in the automobile sector in Asia’s third-largest economy, with passenger vehicles accounting for 16.25 per cent.

Hero has a market share of around 56 per cent in the overall domestic two-wheeler market. At 25.5 per cent, Bajaj comes a distant second, but maintains a healthy lead over Honda and TVS, which have 7.5 per cent and 6.2 per cent market share, respectively. While the auto sector in India is under pressure due to a sluggish economy, the two-wheeler segment is expected to outperform the rest of the industry. The export potential for India’s two-wheelers is huge given that Indian auto companies have under-penetrated potential export markets. Exports account for around 15 per cent in volume terms for the industry.

Meanwhile, the domestic two-wheeler industry recorded sales volumes of 13.8 million units in 2012-13, a growth of 2.9 per cent over the previous year.

Domestic high-end vehicles such as Royal Enfield and KTM (promoted by Bajaj) have been well received. Ajay Shephiya, auto analyst with Centrum Broking adds that high-end segments are faring much better than other value segments. “Royal Enfield is doing really well. Their monthly sales are going up. This is mostly to do with easing of their earlier supply constraints. The waiting period has come down from 6-8 months to 4-5 months due to increase in capacity,” he says.

He says that close to 50 per cent of the total volumes come from the top 15 cities while the rest is from the remaining regions. “There is no clear indication as where this demand is coming from. It depends on the brand and biker preference,” he adds.

For Chennai-based Ameen Nawaz Khan, biking is more than a pastime and a sport—it’s a full-fledged passion—a passion that was fuelled while in school and right through college. The bike he owns now is a 400cc Honda Super 4. What he likes about his bike is the easy facility it provides on public roads as well as racing tracks. The first superbike that the 48-year-old remembers riding is the Honda CBR 600 RR. But Ameen is very clear that superbikes should be ridden only on the race tracks. “Transport it to the racing track on a truck if need be and do whatever you want here,” he advises.

Also believing in driving safe is Hyderabad-based company director Mihir Shah. The proud owner of a Honda Fireblade 1000cc, Shah denies the thrill of speed, insists he is just like any other responsible rider, even though he is passionate about his machine. “Blame some of it on the movies in recent times, as they show bikers in less than a positive light. It can be dangerous if you want it to be. But if you are riding for your own pleasure and not to show off, then it can be a very pleasurable activity in the bargain,” says the bike enthusiast.

SUPERBIKES LEAD

Of the 805 superbikes sold during the period between April and October 2013, the Indian arm of iconic US company Harley-Davidson Inc sold the chunk of 629 units. Harley Davidson, Suzuki Motorcycle India and Honda Motorcycle and Scooter India were quick to spot the opportunity and launched their best selling superbikes in India. Precision Motor India also brought in Ducati bikes from 2009 as CBU. British bike manufacturer Triumph is all set to launch its bikes in India soon.

Acknowledging the significance of India in Triumph’s global strategy, Paul Stroud, director sales & marketing (Triumph global) says: “2013 is a very crucial year for Triumph Motorcycles in India and we are confident about the timing of our market entry. In the past few months, we have carefully assessed the market landscape and will be making well-honed efforts to provide our discerning customers with a complete brand experience.”

Words that will sound like music to the ears of superbike fanatics like 28-year-old Lotus Sabu from Thiruvananthapuram. Sabu owns a Ducati and has clocked 292 km/hr on a Honda Fireblade (CBR 1000RR) and worships Valentino Rossi.

“Kerala has some very talented motorbike riders,” says Sabu, who was a member of the stunt biking team, Ghost Ryderz. The love for bikes was cultivated right from childhood; as a collegiate he rode a Yezdi. It was just a matter of time before superbikes grabbed his attention. He thought of buying one for years, though he was able to realize his dream only in 2012 when he got himself a Suzuki GSX-R 1000. He then traded his Honda CBR 1000 for a Ducati, which he now rides. Quality, good braking system, power, sound, look and weight are the features that make him go gaga over superbikes. “It’s the equivalent of flying a fighter jet,” he says. Another Rossi and superbike worshipper is Chennai’s Roya Khaleeli (19). With three older brothers in the family, it was not surprising that Roya’s interests grew to include motorbikes and cars. As a 15-year-old, she drove a car and then bikes caught her fancy. Not just any bike, but the one that belonged to her brother—a Yamaha R15. Her brother abroad for some time, Roya utilised the opportunity to ride it, with her dad as coach. Last year, she rode it all around the place. Now, she has got her sights set on the latest version of the Yamaha R1 5 and is hoping her father will do the honours.

The best thing that attracted her about the super bike was the way it looked and also the feel. The huge rush of adrenaline that it provides is better than a car, she feels. The best she has managed is 100 km/hr.

With so many seekers, it’s little wonder that this year, the market for superbikes over 800 cc displacement is estimated at 1,500-1,600 units, which will grow to 5,000 by 2015.

Says Anoop Prakash, managing director, Harley-Davidson India: “The constant growth of India’s middle-class has resulted in a growing number of affluent customers that seek new leisure experiences. The premium motorcycle segment in India has grown over the last three years, with consumers looking for riding experiences coupled with style, comfort and performance.”

Sonia Jain (27) should know. Jain, an assistant manager of motor sports marketing and promotions at Yamaha India rides an 1600cc Yamaha MT01. She is the only Indian female Yamaha licensed instructor and is spearheading the Yamaha Female Riding Training Programme. “Started in January, the programme trains young girls to ride bikes and scooters and we train 80 girls per day and go out for these training sessions 10 times a month,” she says.

A complete tomboy, Jain was always more interested in purchasing a bike than designer wear. “It was in 2008 that I convinced my parents to allow me to participate in the Yamaha rally from Manali to Rohtang Pass. We did tasks, rode, blogged and that trip got me completely hooked. Having subsequently ventured into various Himalayan trips, she started taking part in pan-India rallies and rode close to about 8,000 km.

 Among women riders, Ambika Sharma (34), managing director of Pulp Strategy Communications is the only woman in the country who owns a Harley Davidson Road King. She loves the fact that it packs some mean power, equipped with a 1700 cc Twin Cam 103 engine and a 6-Speed Cruise Drive transmission.

 “I found it perfect for long trips and outstation touring. The Road King allows me to plan long distance trips with ample space, power and a well balanced posture,” she says. She rides every weekend, sometimes alone, sometimes with her friends. Unwanted attention from people on the road is inevitable but she says, it’s the bike they check out, more than her.

Bajaj Pulsar

The first sports bike launched in India, in November 2001. Available in variants Pulsar 135, 150 and 180 and the new Pulsar DTS-Fi 200 and 225, the bike has made its presence felt with superior handling and macho styling. The one million plus sales mark was testament of popularity.

Features

Digital Twin Spark ignition or DTS-i technology

Power: 16.5Bhp (12.28kw) at 800 rpm in Pulsar 150 and 13.5Bhp (9.94kw) at 8000 rpm in Pulsar 180

Torque: The Pulsar 150 has a maximum torque of 15.22nm at 6000rpm and the Pulsar 180 a maximum torque of 12.28nm at 6500rpm

Price: Starts from Rs 60,000 and goes up to Rs 87,000 approx.

Hero Honda Splendor

The most successful bike in India. The Splendor was synonymous with the words “100cc bike” for almost two decades. After Hero Motor Corp became a single brand entity, the Splendor Pro was launched.

Features

Power: The power and soul is the 97cc Honda engine

Speed: 0 to 60kmph in less than 9 seconds

USP: Ride and seating position

Mileage: The traditional 4-speed gearbox manages an impressive 65kmpl

Price: Starts at Rs 42,000 approx

Bajaj Discover

Launched in 2009, it became one of the top selling bikes in the segment. It was the first Bajaj bike to feature the improved version 2.0 of the DTS-Si engine. The Discover 100 is also one of the few bikes to have a five-speed gearbox in its segment.

Features

Power: A single cylinder, 4-stroke, air-cooled 94.38cc engine puts out a maximum power of 7.7ps at 7500 rpm and a maximum torque of 7.85nm at 5000rpm.

Speed: The 5-speed transmission offers extra push on the bike’s performance.

Mileage: 91kmpl

Price: Rs 46,000

TVS Star City

A commuter’s two-wheeler, the TVS Star City offers great handling and returns best in class mileage amidst the other 110cc bikes in the country. Stylish body graphics makes the Star look impressive and distinct.

Features

Power: A superior 109.7cc engine that’s of a 4-stroke nature gives out 6.1KW at 7500rpm and a punching 8.1nm of torque at 5000rpm.

Mileage: Coupled with a 4-speed manual gearbox, the Star delivers a class leading mileage of 88kmpl

Price: Starts from Rs 40,000

Hero Xtreme

Successful both commercially and critically. This is in the 150cc segment.

Power: Like the CBZ Xtreme, the new Hero Xtreme is a 149.2cc bike that is powered by a single cylinder 4 stroke engine that can deliver a max power of 14.4 PS and torque of 12.80nm.

Mileage: 66 kmpl

Price: Starts at Rs 65,000 approx.

We are making Harley Davidson accessible at a better price point



Harley Davidson India MD Anoop Prakash, who brought the iconic US bake-maker into the country in 2009, has made sure India becomes an important zone for the company.

Harley, which started assembling bikes at its completely-knocked-down unit at Bawal, Haryana, in 2011, is now planning to make new models – the Street 750 and the Street 500 — from early next year.

The company will also export to Asian and European countries from here. In an interview with Business Line, Prakash shares future plans of the company. Edited excerpts: -

Tell us more about choosing India for manufacturing the Street 750 and the 500…

The decision to launch the Street series is led by our customers’ response globally – 3,000 customers were interviewed in 10 different countries. The feedback we got from young customers from all over the world, including India, led us to create this product and that’s why you see such a distinct set of features and functions in these bikes. For example, in the 750, there is a higher ground clearance, liquid cooled power-train, narrow chassis, new suspension and dark custom kind of looks.

With this manufacturing facility, we will be able to respond to customers all over the world. Earlier, all our supply chain originated in the US. But now, we can respond to the customers faster.

When are you launching the Street 750 and the 500? How will you price them?

We will unveil the Street 750 at the India Bike Week in Goa, to be held in January, and formally launch it in India at the Auto Expo in February. After the Auto Expo, we will start bookings and deliveries. We have not decided when exactly we will launch the Street 500. We want to first focus on the 750 as it’s been customers driven. You can expect the Street 500 by 2015.

The 750 will be priced at under Rs 5 lakh on road. Right now, both have been launched in the US – at $ 6,700 (Rs 4.15 lakh, for the Street 500) and $ 7,500 (Rs 4.65 lakh, for the Street 750).

With manufacturing in India, the prices of your products will also come down. Do you see any competition from other players?

I think we led the leisure motorcycling culture to develop in India. So, when it comes to leisure motorcycling, we think our brand is strong and we are at the leadership position. The Street 750 and the 500 will meet the requirements of young bikers. Making Harley Davidson accessible at a better price point is allowing them to get the bike that they want, rather than them waiting till they can afford it. We have financing schemes with HDFC Bank and ICICI Bank, which have helped customers get our bikes. About 50 per cent of our motorcycles are sold through these banks with good EMI schemes (11-12 per cent interest).

What will be the mix of components supply for them in India?

Our components strategy is global. Some will be imported and some will be local. We will be increasing the use of Indian components because of the plant here.

When will you start manufacturing other bikes?

This is just for the Street series right now. There is no other plan for now, as it all rests on how we do with the Street. Right now, the focus is on delivering the Street – producing it and getting it out in volume and grow it in different markets.

What is your sales target this year?

We can give cumulative numbers. From 2010 to the end of this year, we hope to sell 4,000 bikes. From mid-2010 to the end of last year, we sold nearly 2,000 units.

Any dealer expansion plan?

Right now, we have 10 dealers in India and will add three more by the end of this year— in Pune, Goa and Jaipur. Next year, we would hopefully launch two or three more. We are targeting some more satellite cities like Surat, Coimbatore, Calicut and Guwahati.

Eicher Motors: The Royal Enfield show continues



Eicher Motors stock gained about six per cent in three sessions after announcing better than expected performance from its Royal Enfield motorcycle division. The performance helped offset some of the volume concerns for the company's commercial vehicle (CV) joint venture with Volvo. While consolidated sales grew 14 per cent year-on-year to Rs 1,683 crore, Ebitda (Royal Enfield contributes 70 per cent of consolidated Ebitda) was up 41 per cent to Rs 157 crore. Adjusted profit after tax (excluding one-off items) was at Rs 86 crore up 33 per cent.

While the motorcycle sector growth has been flattish, the company has sold 60 per cent more bikes in the September quarter, against the year-ago quarter. Though the commercial vehicle venture is expected to struggle on the volume front given large discounting and poor demand, considering the annual production targets of 175,000 and 250,000 for CY13 and CY14, respectively, expect motorcycles volumes to grow by 54 per cent in CY13 and 43 per cent in CY14.  

On the new product front, the company is planning to launch its Continental GT motorcycle in India at the end of November. The company launched the bike globally (US, UK and Europe) in the September quarter and has been priced at $6,000 or in the Rs 3.6-4 lakh bracket. The company has also lined up a new range of above five-tonne trucks and buses going ahead.

Given the strong margins of its motorcycles business and prospects going ahead, most analysts have a buy on the stock with a target price in the range of Rs 4,200 to Rs 4,400.

In additions to motorcycles, the key trigger for the company is the increased outsourcing of engines by the Volvo group from the joint venture's medium duty engine project. Macquarie analysts have an outperformer rating with a target of Rs 4,320 due to its multiple levers of growth – fast growth in leisure bikes, an expanding CV portfolio and the production ramp-up in the engine business. The recent run-up in the stock means near-term upsides are limited from the current levels of Rs 4,205. Hence, a correction could be a good entry point.

Two-wheelers outperform

The outperformance by the motorcycle segment has been the key highlight with volumes growing at 61 per cent year-on-year. Volume growth over the last five quarters has been in the 45-60 per cent range. Higher volumes (which helped improve operating leverage), better product mix (more sales of its 500 cc bikes) and lower costs helped the Royal Enfield division (motorcycles) to record its highest Ebitda margin at 19.3 per cent. This is over 420 basis points more than the year-ago margin number and 150 basis points over the June quarter. Given the six-month waiting period for its bikes, the company is focussing on ramping up its production at the Oragadam plant in Tamil Nadu.

Commercial vehicles resilient

In contrast, CV sales have been severely impacted by a slowing economy and drying of demand. Though volumes fell by 13 per cent year-on-year for the September quarter, the company managed to keep revenue growth in the positive territory, up 1.3 per cent. This was due to the rise in average selling prices, which were up 16 per cent year-on-year on the back of imported Volvo trucks, as well as ramp-up in the company's medium duty engine project.

Kinetic plans to launch hybrid electric three-wheeler

Kinetic Engineering Ltd. (KEL) is planning to launch its hybrid electric three-wheeler (auto) in the next 12 months.

“Research work on the development of the hybrid electric auto engine in collaboration with the Council of Scientific and Industrial Research (CSIR) is in advanced stages, and we are hopeful of completing the project in the next few months,” Vice-Chairperson of KEL Sulajja Firodia Motwani said here on Thursday.

Speaking on the sidelines of the third Mega Trends Road-show, organised by the Federation of Indian Chambers of Commerce and Industry, Ms. Motwani admitted that it would be a challenge to keep the cost of the hybrid electric three-wheeler as low as possible. “With the help of smart engineering and new technology, we will try to keep its price much lower though expecting parity with the traditional three-wheelers will be too much for asking in the initial stages,” she noted.

Stating that manufacturing renewable energy-based transport vehicles was an evolving sector, she said the automotive manufacturers working on the technology were expecting sops from the government to keep the prices low. Ms. Motwani noted that the Centre had already promised to spend Rs.20,000 crore on the National Electric Mobility Mission Plan 2020.

“The industry is expecting a law (an Act) to support the national policy on electric mobility in the next session of Parliament,” the Vice Chairperson said. She envisaged a huge demand for vehicles run with renewable energy in the next ten years.

On the battery-operated vehicles launched by KEL earlier this year, Ms. Motwani said they were doing well in the eco-tourism, leisure/sports, corporate, pharmaceutical and hotel sectors apart from airports and railway stations.

Some companies were importing the vehicles and there were some local players but KEL was the only national player in the segment, she said when asked about the competition.

Keywords: Kinetic Engineering Ltd., hybrid electric three-wheeler, autorickshaw, Sulajja Firodia Motwani

Dec slowdown to trim waiting time for Centuro


Mahindra Two Wheelers Ltd (MTWL) plans to cut the waiting period of its Centuro motorcycle by 3-4 weeks by the end of this month or early December. The Mahindra Goup company has also won international patents for the technologies used in Centuro.

MTWL had launched Centuro on July 1, positioning it in the 100-110cc segment with a price tag of Rs 45,000 (ex-showroom New Delhi). The two-wheeler at present has a six-week waiting period.

“We are sitting on 25,000 bookings. We are confident that we will be able to bring down the waiting period by December with vehicle sales slowing during the month,” said Viren Popli, MTWL’s Executive Vice-President.

Traditionally, December is a slow month with buyers postponing purchases and vehicle registrations to the next year.

TO DOUBLE CAPACITY

The Mumbai-based company is also planning to double production capacity to 2,000 units per day. Centuro is being manufactured at its Pithampur plant in Madhya Pradesh.

“If everything goes well, we will double the capacity in the next 3-6 months. This would further help in bringing down the waiting period,” Popli added.

From the 30th position at the time of launch, the Centuro has moved up to be the 13th most sold motorcycle brand in India, according to an MTWL study.

Of its total sales of 75,000 units (from launch to October-end), almost 40 per cent came from the South. Senior Vice-President P.S. Ashok, who heads the company’s R&D and Pune operations, said: “Traditionally, we have always done well in the South.

“These markets have understood and appreciated the features of the vehicle well, while the general customer perception of Centuro is also quite good.”

MTWL also plans to increase the total number of touch points in theSouth to 600 (from 400) and double the all-India number to 1,200 by the end of this fiscal.

GLOBAL PATENTS

The company has received global patents for technologies such as the fuel gauge system, immobiliser system (anti-theft), distance–to-empty indicator (to gauge the distance the bike will run with the remaining fuel) and a method for automatic ignition cut-off (switching off engines at red lights).

“These innovations were based on customer insights and have struck a deep chord with many of our customers,” Popli said, adding the patents were granted on October 31.

The company will use the automatic ignition cut-off system, which saves fuel, in other models too,

Ashok said. MTWL had applied for the patents, which were developed in-house at its Pune R&D centre, at the launch time itself.

Waking up to R & D, finally

After years of neglect, domestic two-wheeler companies are shoring up their research and development (R&D) in the wake of intensifying competition triggered by global players.

A quick look at the R&D spending of Indian two-wheeler firms reveals a stronger thrust being given on design and development. Companies such as TVS Motor, Bajaj Auto and Hero MotoCorp are all spending more on R&D now. Though their R&D spending hasn’t increased dramatically it is better compared to the past.

“Clearly, the sector is new to the R&D game in India. There may be some exceptions up to a point. But, on the whole, the global players have the scale, skills and most importantly, processes that put them at significant advantage at this time. Therefore, it is incumbent upon the Indian companies to achieve maturity in these areas at a rapid pace,” Kumar Kandaswami, senior director, Deloitte India, says.

While Japanese firms spend 5-6 per cent of their revenues on R&D, Indian companies’ R&D expenditure was always at one per cent or even lower. However, it is now hovering around 1-2 per cent and is likely to go up in the coming years as Indian firms embrace R&D and innovation wholeheartedly to grow. Mr. Kandaswami feels that R&D focus is absolutely important for two-wheeler firms to fight global majors and stay afloat. “The foreign brands are making significant progress and seem to be dominating some product categories or markets. As they gain experience, they will spread their distribution and product range — the only way to fight them in the market would be to have a pipeline of exciting launches. Further, on some of the products push down the life-cycle cost of ownership — both of which will require superior R&D,” he adds.

But he also admits that there is fair amount of focus on R&D on the part of Indian companies. While R&D is one part, the whole New Product Development (NPD) process is where Indian companies have to build strength.

TVS Motor leads

Among the Indian two-wheeler firms, TVS Motor Company currently leads the R&D table, followed by Bajaj Auto and Hero. TVS Motor's R&D spend has increased as the company has been working on new engine platforms to roll out many new products for a strong comeback. The company spent 1.79 per cent of its revenues on R&D in 2012-13, up from 1.68 per cent in the previous year.

“ Over the last five years, the automobile market has evolved and with an increasing demand for technologically superior products, the number of new projects that we are working on has doubled. Manpower has also gone up proportionately increasing by around 40 per cent or so,” says Vinay Harne, President - NPI, TVS Motor Company. “Our strong focus on R&D capabilities has enabled us to bring out products that compete with global players in countries where we do business.," he adds.

In-house success

For Bajaj Auto, strong in-house R&D capabilities have come in handy to launch vehicles with higher fuel efficiency and performance. Its R&D spend has increased to 1.2 per cent (of the total sales) in 2012-13 from 0.8 per cent in 2011-12. Bajaj’s Triple Spark Technology for the Pulsar family has won accolades. “Our strategy of differentiation is possible only due to in-house capability of developing engines and bikes. The highly successful platforms of Pulsar and Discover are complete in-house developments,” says K Srinivas, President - motorcycle business, Bajaj Auto.

Bajaj claims undisputed leadership position in the sports segment with Pulsar (with 47 % share) and is a strong challenger in the mileage segment with Discover (18 % share).

Global design partners

Though Hero MotoCorp's R&D spend was below one per cent in 2012-13, the largest Indian two-wheeler brand has embarked on a slew of initiatives on the R&D front ever since its separation from a joint venture with Honda.

While it has planned to invest more in R&D, the company has global design and technology firms as partners now to develop next generation two-wheelers.

Hero is also setting up a world-class technology and integrated R&D Centre at Jaipur with a host of facilities such as innovation labs for component design, engine and vehicle testing, test tracks and vehicle simulation unit, among others.

Last but not least

Meanwhile, Mahindra Two Wheelers, latest entrant, has also set up an exclusive R&D centre in Pune to develop engines for its two-wheeler range, while Mahindra Research Valley, Mahindra’s group’s automobile R&D facility near Chennai, would also provide a big support. “Overall, Indian players remain focused on development of new technology — both vehicle side and engine side besides financial investments in global firms in last few years to further strengthen their design and engineering capabilities. Also, Indian players are investing to produce and export vehicles that are compliant with applicable standards in overseas markets — for instance: ethanol mix fuel and flexi-fuel vehicles for the Brazilian market,” points out Subrata Ray, senior vice president – corporate ratings, Icra. Though global OEMs have superior design and technological capabilities, emerging strong eco-system for design and development in India should come in handy for the Indian brands to try and match the prowess of global players in the coming years.

SCOOTER STUDS

SCOOTER STUDS

Thanks to the Harleys, Bullets, Pulsars et al, bikes were supposed to be for the red-blooded males and scooters for gals, right? Maybe not

:: Rajiv Singh 

Kanav Kapur is madly in love. In fact, now he just can’t live without his ‘dream’ love — not his girlfriend but a brand-new yellow Vespa that he bought a month back. 

    “It’s very very sexy. Girls stare at my yellow Vespa when I am driving,” says the 22-year-old businessman, who was a motorbike freak before recently converting to scooters. “It looks good on me and suits my personality,” adds Kapur, who runs a textile manufacturing unit in Delhi. 

    And for those die-hard testosterone-driven bikers who would scoff at Kapur, he has some advice: “Go, take a walk, man. It’s attitude that makes you masculine, not scooters or bikes.” 

    Kapur is not alone in his admiration for scooters. A country that still can’t get over the memories of Hamara Bajaj and LML — both scooters with gears and predominantly driven by males — is seeing a transformation in attitude as more and more men, especially youth, start driving gearless scooters. 

    In the April-September period of 2013, while scooter sales grew 16.6% over a year ago, bikes struggled at just 0.9%. And for the first time in over a decade, scooter sales surpassed motorcycles in a month. Honda Activa, which has over 43% share in the scooter segment, sold 142,000 units in September to overtake Hero MotoCorp’s Splendor motorcycle as the largest selling two-wheeler in a month. Splendor managed to sell 124,217 units. 

    While women still account for over a third of the gearless scooter users in the country, it is the men who have stepped on the gas pedal; they’re aggressively lapping up gearless scooters whichtill not long time back were derided as ‘feminine’ and ‘made-for-women’ products. 
The New Male 

So what has happened to the macho concept of masculinity and ‘big boys only drive bikes’ theory? It’s gone for a toss, say brand experts and industry analysts. The concept of masculinity has been silently undergoing a transformation over the last few years as males are becoming more comfortable with their sexuality, they point out. 

    Codes of aspirations are shifting. At one level, entrylevel bikes continue to be used for commuting sans the lifestyle appeal. At another level, the appeal of fashion and international style coupled with convenience offers a novelty to today’s consumers who have no reference to the old imagery of scooters. 

    “Just as men don’t cry is a myth, boys don’t drive scooters is equally a myth,” says Subrata Chakraborty, managing director of Brand Curry, an advertising and branding agency in Delhi. 

    Versatility is the new standard of masculinity which is pushing machismo more and more into the hygiene zone, says Chakraborty. “While Ranbir Kapoor’s six pack is good, it’s his attitude that is cool and connects better with the ‘new male’ in India,” he says, explaining why Hero’s Maestro latest TV commercial of Kapoor has suddenly made the scooter look so cool for men. 

    Harish Bijoor, who runs an eponymous brand consultancy firm, says there is a very thin dividing line between the masculine and the feminine. Ancient Indian literature tells us of the ‘ardhnarishwar’ concept at large. Eastern philosophies have also put forth the theory of the yin and the yang. Both go to say conclusively that we are all an amalgam of the masculine and the feminine, he explains. 

    “To that extent, every brand consumption category witnesses consumption gender cycles and changes continuously. The scooter segment is surely an example.” 

    In the beginning, when a scooter was a motorised option, men flocked to it. And then came the dual usage, with more and more women opting for it. “This is when the product category image changed and assumed a gender tag. So, men consciously moved out,” says Bijoor. 

    The cycle, however, continued with more and more liberated men entering the terrain. “These are men who are confident of their sexuality and don’t give a damn about what others think or say. Consumption has now been evened out by the genders.” 

Drivers of Change 

Piaggio’s Vespa in particular and Hero Moto-Corp to a lesser extent are brands that have been responsible for pushing this cycle of consumption towards the male as well, adds Bijoor. Aggressive brand building exercises and sexy looking offerings have made the male sit up and take note. “All men are not looking at power between their legs. Some are looking at beauty, grace and come-hither auto looks as well.” 

    Agrees Anil Dua of Hero MotoCorp. “What matters most for men is attitude and scooters were lacking this badly,” says the senior vicepresident (sales and marketing) at Hero MotoCorp, India’s largest twowheeler maker. 

    Hero Maestro’s ‘Such a Boy Thing’ campaign with Ranbir Kapoor has not only made scooters l o o k     c o o l a n d trendy but has also added an Xfactor to the segment, avers Dua. For this financial year up to the end o f N ove m b e r, Hero MotoCorp is set to sell more than 2 lakh Maest ro s . T h i s i s mu c h m o re than what it sold during the entire previous fiscal year, he informs. 

    From 7% of the entire two-wheeler sales in 2011, scooters now make up 11% of Hero MotoCorp’s portfolio. “You can gauge the popularity of scooters by the fact that we are not able to meet the demand,” says Dua, adding that the company would be scaling up manufacturing capacity from 60,000 scooters per month to 75,000 by January. “Nobody would have thought just a few years back that gearless scooters could ever turn masculine. But it has happened,” adds Dua. 

Aggressive Sporty Look 

For scooter makers, it’s indeed a miracle and they are busy making the most of it. In May this year, Japanese auto major Yamaha’s Indian subsidiary rolled out automatic scooter Ray Z to target young males between 16 and 22 years. The scooter’s smoked finish visor upfront, aluminium rear grab bars, an instrument panel with a carbon fibre-patterned background give it an aggressive sporty look — something that makes men feel more comfortable and can identify with. 

“It’s not a scooty but a scooter,” clarifies Ateet Kumar who bought a Honda Aviator just a few months back. “Scooters are convenient, stylish, look attractive and are value for money,” explains the 28-year-old insurance agent based in Gurgaon. Taunt him about masculinity and bikes, and you’re likely to get a crisp counter: “What has masculinity to do with scooters? It’s just a matter of perception.” 

And perception is what matters. So Honda took ample care to rejig the scooter specs. While Aviator’s upright sitting position is especially designed for men, its alloy wheels enhance the styling of the scooter. YS Guleria, vice-president, sales and marketing, Honda Motorcycle and Scooter India (HMSI), says it’s a myth that scooters for women sell more. “In fact, a family scooter sells more. More than 70% of automated scooters are family scooters,” says Guleria. 

The concept of masculinity has changed and styling has done the trick. Design, innovation and technology have made scooters more appealing to men. 

Close on the heels of the launch of Ray Z, TVS Motor rolled out its scooter for males — Jupiter — in September. The company already has Scooty Pep Plus for the female drivers and Wego has been branded as unisex. 

    Over the past two years, there has been a sovereign shift in the customer demographics in the scooter industry, with a large chunk of the pie being consumed by male customers, says Anuriddha Haldar, general manager (marketing and head of scooter vertical) at TVS Motor. 

Tech Check 

This can be attributed to several factors, starting with the scooter itself evolving from being women centric. Incorporation of new technologies with improvements in engine performance and fuel efficiency mean that scooters too offer the benefit of higher mileage, like a motorcycle while offering a host of other features. 
    “The new segment which emerged consumed the largest chunk of the scooter industry pie with the single male category accounting for close to 40%,” says Haldar.

    TVS undertook extensive market research for around 30 months to understand the exact requirements of this emerging category of single males. And subsequently the company added features to suit their needs. “Jupiter has features such as 12-inch alloy wheels, a larger wheel base, more leg space and storage, telescopic suspension, gas-filled shock absorbers and an all-aluminium low-friction CVTi engine,” says the TVS marketing honcho. 

    Two-wheeler maker LML, which has been lying low, is also getting ready to launch gearless scooters for men early next year. 

    “The walk-through design of scooters coupled with easy manoeuvrability, safety, ease of handling and storage space have resulted in their mass popularity among men,” says Deepak Singhania, chairman and managing director of LML. 

    Ravish Guliya, a 30-year-old real estate consultant in Delhi, too, vouches for the convenience and ease that scooters provide. But there’s another plus as well — its multi-purpose utility. “It’s not only about attitude, but convenience as well,” he says, adding that a scooter can be used by other members in the family unlike a bike that can be driven by males only. 

    Men will be men, whether they drive scooters or ride bikes, he says. 

Hero MotoCorp: Bridging gap with Bajaj

Bajaj Auto and Hero MotoCorp have outperformed the BSE Auto Index, as well as the Sensex, by a wide margin over the last few months. While Bajaj Auto has gained on stable margins and export pick up, Hero MotoCorp is up on festival demand and hope that rural sales will pick up in the second half of the financial year.

While September quarter results from both companies were above analyst expectations, Hero MotoCorp's volume performance in the domestic market has been much better than Bajaj in recent months. This is likely to impact the valuation gap between the two with Bajaj Auto normally trading at a premium to its larger peer. The higher price to earnings multiple for the Pune-based company is due to its higher margins and diversified geographic sales base. Also, the split between Hero and erstwhile partner Honda, and subsequent fear of market share loss, had led to de-rating of the Hero stock in the past. Credit Suisse analysts say Hero MotoCorp's price to earnings multiples had de-rated from 16 times one-year forward earnings estimate in January 2012 to 12 times in May 2013.

Whereas, with Bajaj Auto’s prospects holding up, aided by exports, its stock valuation largely ranged 13-16 times one-year forward estimates. However, with Hero outperforming expectations on volumes, the valuation gap which was about eight per cent in May has come down to 3.5 per cent currently as Hero has started getting re-rated. Says Manish Sonthalia, senior vice-president and fund manager, Motilal Oswal AMC, “Given the performance of Hero MotoCorp over the last two months, the valuation gap between Hero and Bajaj Auto has reduced.”

Bajaj Auto is currently trading at 14.1 times its FY15 estimates, while Hero MotoCorp is trading at 13.6 times. Given the performance of the two-wheeler sector in the festive season and export performance of Bajaj Auto, most analysts are bullish on both companies, with Bajaj Auto a favoured pick over a longer term. However, in the near term, given the rural franchise of Hero MotoCorp, the larger company finds more favour among analysts than Bajaj Auto. The long-term call on Hero will depend on its ability to scale up its international operations as well as counter the rising competition from Honda.

Hero is getting the volumes

Hero has been an outperformer registering a 3.3 per cent volume growth in the two-wheelers space to 3.53 million in the first seven months of FY14, while Bajaj Auto's domestic volumes were down 11.8 per cent to 1.31 million. In fact, Hero has been registering record volumes this festive season with October sales up 19 per cent year-on-year to 6.14 units, while Bajaj's sales was down 12 per cent to 228,000 units.

Competition to remain high

While Honda has taken market share in two-wheelers from both Bajaj Auto and Hero MotoCorp, given its plans to go further down the motorcycle chain (economy and lower executive; price below Rs 45,000 per unit), Hero is likely to see more competition than Bajaj Auto. Already Honda has made inroads into the Hero stronghold of the executive segment (Rs 45,000-65,000) with the Dream series bikes of Neo and Yuga, as well as the CB Shine, Twister and Stunner. The executive segment accounts for 65 per cent of motorcycle industry volumes and 66 per cent of Hero's volumes. In this segment, Hero lost 157 basis points of market share in the first half of FY14, as compared to FY13, with its share hovering at 61 per cent, while Bajaj’s is down 451 basis points during the same period.

Ambit Capital analysts Ashvin Shetty and Ritu Modi, believe that given Hero’s greater exposure to the executive segment, it will be impacted more by HMSI (Honda) as compared to Bajaj Auto. With Honda looking at entering the economy  segment (below Rs 42,000; 20 per cent of two-wheeler market) in FY15 and plans to become India's largest two-wheeler maker by 2020, there could be further market share loss for the two Indian players. Hero has planned 7-10 launches, including some with engines developed in-house, even as it is aggressively looking to have a larger international presence. While its recent market share losses have come down, how it is able to cope will also reflect on its share price and valuations.

Austrian firm KTM to expand capacity in Chakan

Austria-based KTM Sportmotorcycles AG on Wednesday said it plans to expand its manufacturing capacity in India to one lakh units by 2016 from 30,000 now, while the company is preparing for a major sales push and the launch of the Husqvarna bike in the country.

The sports motorcycle maker, which sold 7,500 units in India last year, aims to sell around 11,000 bikes this financial year.

KTM, which has a joint venture with Bajaj Auto Ltd, makes three motorcycles – Duke 125, Duke 200 and Duke 390 — at the latter’s Chakan plant in Pune. While the Duke 200 and the 390 are sold in India priced at Rs 1.50 lakh and 2.04 lakh, respectively, (on-road, Delhi), the Duke 125 is only for exports.

“We have a small capacity right now at Chakan, but we will expand that in the next three years, with the new models coming in,” Stefan Pierer, CEO, told reporters here.

He said the company will launch the Husqvarna motorcycles in India in two years. KTM will use the Chakan plant to roll out the bike.Earlier this year, KTM had acquired Husqvarna from Germany's BMW.

By 2014-end, KTM expects to sell five-six different models in India, and plans to launch the RC 390 next year and the Duke 690 by 2015, Pierer added.

Exports

The company exports to various countries in Asia, Africa and Latin America independently. Sales in Nepal are handled by Bajaj through its dealers there.

Amit Nandi, Vice-President-Probiking, Bajaj Auto, said: “Right now, we are selling both KTM and Kawasaki brands through 100 dealers, which will be expanded to 130 by the end of this financial year. We will now enter smaller towns and cities,” said Amit Nandi, Vice-President-Probiking, Bajaj Auto. “We exported around 25,000 KTM bikes last financial year and sold 7,500 in India. This year, our target is to achieve 50 per cent (around 11,250) more sales in India.”

Aravind takes overall title

Team TVS Racing’s K.P. Aravind (173 points) stamped his class yet again, clinching the overall title in the Foreign Open class (250-500cc) in the fifth round of the FMSCI-MRF MOGRIP National supercross championship at the makeshift CODISSIA track here.

A strong finish was enough for Aravind to seal the title entering the final leg. And, the 26-year-old from Bangalore did that in an exemplary fashion by securing a double podium finish much to the delight of the large crowd.

Pramod Joshua of TVS Racing took home the overall titles in the Indian Experts Group ‘B’ and ‘C’ categories.

The results (provisional): Foreign Open: Group A (250 / 500cc): Moto 1: 1. Harith Noah (TVS Racing); 2. C.D. Jinan (Kerala); 3. K.P. Aravind (TVS Racing). Moto 2: 1. K.P. Aravind; 2. Harith Noah; 3. C.D. Jinan. Novice: Group C (upto 260cc): Moto 1: 1. Suhail Ahmed (TVS Racing); 2. A. Aanand (Mangalore); 3. Sachin Ghorpede (9T9 Racing).

Indian Experts: Group B (upto 260cc): Moto 2 : K.P. Aravind; 2. Pramod Joshua (TVS Racing); 3. R. Natraj (TVS Racing).

Locals: Group B (upto 260cc): 1. Jagadish (Hosur); 2. A. Aanand (Coimbatore); 3. M. Santosh (Coimbatore). Indian Experts: Class C: Moto 1: 1. Pramod Joshua; 2. R. Natraj; 3. Yuva Kumar (TVS Racing). Private Experts: Group C (upto 260cc): Moto 1: K.C. Grishin (Bangalore); 2. N.S. Anoop (Kochi); 3. Pinkesh Thakkar (9T9 Racing). Overall champion: Foreign Open (Group A): K.P. Aravind 173 pts. Novice (Group C): Suhail Ahmed 95.

Indian Experts (Group B): Pramod Joshua 89. Indian Experts (Group C): Pramod Joshua 80. Private Experts (Group C): V.S. Naresh (9T9 Racing) 84. Private Foreign Open (Group A): Gaurav Khatri (Team Goa Racing) 148.

Why Pink is Red Hot Marketing Mantra

From champagne to shoes & diamonds to lingerie, pink is red hot marketing mantra

 "I believe in pink", Audrey Hepburn had famously said. So do lots and lots of people - and companies.

In life, the colour pink has many associations. Pink slips are grim stuff. Pink cities, like Jaipur and Marrakesh, are considered as epitomes of urban prettiness. Pink ribbons are symbols of awareness about fighting breast cancer. Pink triangles are used as representational symbols for gays, lesbians and bisexuals. Pink in politics means diluted left-wing radicalism. And the Chinese never had a word for pink till they came in touch with the West. So, the Mandarin word for pink literally means 'foreign colour'.

In certain lines of business, though, pink usually means one thing - a great marketing tool.

Early October, global mining giant Rio Tinto received a record $2 million bid for an Argyle pink diamond. The pink diamond was a part of its 2013 tender. Red hot prices for pink diamonds are the norm, not the exception. Auction house Sotheby's is expecting a 59.60-carat oval cut pink diamond — described as "full of fire and light" - to fetch a record $60 million in an auction to be held this month in Switzerland.

Pink glitters beyond diamonds. It's the colour of high end marketing, a signaling mechanism for consumers who don't mind paying for branding attributes that include cool, sexy and being different.

The pink portfolio includes champagne, high end women's shoes and bags, lingerie, cosmetics and jewellery. Add to that list pink flowers for ceremonial decorations and pink scooters for making that really cool statement.

There are few better illustrative examples of the power of pink than the 2002 launch of 'Pink', a lingerie, perfume, apparels and beauty products brand from Victoria's Secret that targeted young women. 'Pink' was judged as one of the smartest market-making moves by Victoria's Secret.

Pink shines even in charity auctions. Priyanka Chopra's pink and spiky Christian Louboutin shoes - the actor-singer sported them in the music video of her debut album, Exotic - fetched a handsome Rs 2.5 lakh in an auction for a charity.

Marketing mavens in America have a phrase that sums up pink's proven success in targeting women consumers - pink it and shrink it. Make something pink, and make it small. The mantra would apply to India as well.

Pink, says Abraham Koshy, professor of marketing, IIMAhmedabad, is a colour that lends itself to many interpretations. For luxury products pink signals "cool" and "ostentatious".

For clothes and accessories pink is associated with in-your-face femininity. For diamonds pink means rarity. Because the colour has no fixed meaning, says Koshy, it can be used across categories.

  Marketing strategies of a large number of companies in India bear this out. Rajiv Singhal, India representative of Comite Champagne, which promotes Cham-pagne region sparkling wines globally, says demand for pink champagne is growing in India.


The category accounted for almost 14 per cent of the 348,000 champagne bottles imported to India last year. Bear in mind pink champagne is about 30 per cent costlier than white wine. American luxury clutch brand Judith Leiber sells pink bags priced Rs 2 lakh and more. "Pink is the colour of choice after gold and silver", says Varsha Ahuja, brand manager, Judith Leiber, India.

Ahuja says pink clutches are particularly popular for bridal trousseaus. Swiss eyewear-to-perfume maker Davidoff has launched a pink perfume - Cool Water Sea Rose - that's being marketed aggressively. Jewellery designer Nirav Modi designs around 50 pink diamond-based pieces annually.

Demand always outstrips supply Modi says, even though pink diamondbased jewelry can be up to twice as expensive as its colourless diamond-based counterpart. If a clear one carat white diamond costs about Rs 7 lakh, the same in pink will cost Rs 7 crore, says Modi.

His pink diamond-studded Golconda Lotus Necklace was auctioned at Christie's Hong Kong for Rs 16.29 crore in 2010. Pink flowers? Why not. Florist chain Ferns 'n' Petals recently imported 7,000 bundles of pink roses (each bundle has 100 pieces) for a client's wedding decor. Pink flowers contribute 40-50 per cent of FNP's yearly sales.

Lalita Raghav, FNP's vicepresident, weddings, says pink is versatile, suitable for traditional as well as modern themes, and for day and night. Many women buy pink clothes, every marketer knows that.

Some men do, too. "Indian men would shy away from pink clothes. But some of them are now ready to experiment with pink," says Rajesh Jain, chief executive of Lacoste India. About aquarter of Lacoste's springsummer offerings for women in India are in pink.

For men's tee-shirts, the pink quotient has gone up from three shades to a dozen shades. May be the final proof of pink's success in India comes from the most unlikely product - pink two-wheelers. TVS Motors' sells 15,000 to 20,000 units of Scooty every month. Nearly a third of this 'forwomen' two-wheeler is coloured pink.

Audrey Hepburn would have probably loved riding a pink two-wheeler.

Aravind takes overall title.

Team TVS Racing’s K.P. Aravind (173 points) stamped his class yet again, clinching the overall title in the Foreign Open class (250-500cc) in the fifth round of the FMSCI-MRF MOGRIP National supercross championship at the makeshift CODISSIA track here.

A strong finish was enough for Aravind to seal the title entering the final leg. And, the 26-year-old from Bangalore did that in an exemplary fashion by securing a double podium finish much to the delight of the large crowd.

Pramod Joshua of TVS Racing took home the overall titles in the Indian Experts Group ‘B’ and ‘C’ categories.

The results (provisional): Foreign Open: Group A (250 / 500cc): Moto 1: 1. Harith Noah (TVS Racing); 2. C.D. Jinan (Kerala); 3. K.P. Aravind (TVS Racing). Moto 2: 1. K.P. Aravind; 2. Harith Noah; 3. C.D. Jinan. Novice: Group C (upto 260cc): Moto 1: 1. Suhail Ahmed (TVS Racing); 2. A. Aanand (Mangalore); 3. Sachin Ghorpede (9T9 Racing).

Indian Experts: Group B (upto 260cc): Moto 2 : K.P. Aravind; 2. Pramod Joshua (TVS Racing); 3. R. Natraj (TVS Racing).

Locals: Group B (upto 260cc): 1. Jagadish (Hosur); 2. A. Aanand (Coimbatore); 3. M. Santosh (Coimbatore). Indian Experts: Class C: Moto 1: 1. Pramod Joshua; 2. R. Natraj; 3. Yuva Kumar (TVS Racing). Private Experts: Group C (upto 260cc): Moto 1: K.C. Grishin (Bangalore); 2. N.S. Anoop (Kochi); 3. Pinkesh Thakkar (9T9 Racing). Overall champion: Foreign Open (Group A): K.P. Aravind 173 pts. Novice (Group C): Suhail Ahmed 95.

Indian Experts (Group B): Pramod Joshua 89. Indian Experts (Group C): Pramod Joshua 80. Private Experts (Group C): V.S. Naresh (9T9 Racing) 84. Private Foreign Open (Group A): Gaurav Khatri (Team Goa Racing) 148.

Royal Enfield buyers are future Harley riders

The Harley-Davidson India’s managing director talks about India’s role in developing Street, the company’s export base and the key to its successNew Delhi: Harley-Davidson has been a success story in India. While its sales have been consistent in a slowing market, a little more than three years’ experience locally led it to develop a sleek and small motorcycle, the 750cc Street, which it will launch at the Delhi Auto Expo February. Mint first reported Harley’s plans in April 2011. In an interview, Harley-Davidson India’s managing director Anoop Prakash speaks about India’s role in developing Street, the company’s export base and the key to its success. Edited excerpts:

You have managed to sustain fairly reasonable sales of 80 to 100 bikes a month in the past three years, which clearly means the Harley story was not only about pent-up demand for the brand.

I think we have been really focused on two priorities. One is delivering great customer experience and there is unrelenting focus not only at the subsidiary level but at the company level and also at the dealer level. If you look at our dealer partners, they have done a great job in delivering world-class experience—what Harley-Davidson demands of them. I think that is a big reason for continuous growth.

The other priority has been that we have been very thoughtful on how we have entered the market. As we have moved into the market we have also made everything more accessible, and accessibility is a pillar of our strategy while coming into India. What I mean by that is where our locations... whether they are metros or tier III cities... we (are) accessible to customers who are fond of leisure biking.

Also, the CKD (completely knocked down) operations was a big step. We started in 2010 and then we immediately started CKD and now we have nine models on offer in the Indian market. Now with Street 750, which will be coming to India, we will be entering another accessible point.

Basically, the mangoes-for-bikes diplomacy has worked fine for you so far. (The US allowed import of Indian mangoes after a gap of 18 years after India granted Harley permission to start operations 2007)
That was the entry point and that was in 2007. But then we had to think about a thoughtful strategy and how would we enter the market. That’s why we came in 2009 after thinking through what is the strategy after talking to customers in India. We not only invested in building the brand but also built a motorcycle culture. We are proud and are happy to (take) credit for that.

There is another reputation that you seem to be building. People say Harley sells and then struggles at the service front. Your bikes are available in the pre-owned market within 3 years, which is not a usual thing for a product like Harley.

Yes, they have and a lot of customers have upgraded their bikes. That’s really what we are selling for. We have seen a great amount of customers moving from their initial Sportsters and now they are riding Dynas. So, they have upgraded once they have got the flavour of what the Harley-Davidson experience is.
So, you do not agree that there is a problem at the service front?

No, not at all. We talk to customers on a regular basis at rallies or at dealerships. There is great enthusiasm and (it) gives us opportunity to improve. From three years back to now, we have improved dramatically in terms of our supply chain availability, and that’s a big part of being the first one in the market. You get to learn faster than everyone else.

Let’s talk about the Street series of bikes.

Street 750 will be coming to India first and not the Street 500. We have got a lot of feedback and Street 750 is what a lot of people want and they are looking forward to it. They wanted to have the same power but also the manoeuvrability that comes with the Street platform.

What percentage of work has happened in India for the Street platform?

Oh, it’s exciting. It’s a global motorcycle for a new urban generation. We have done at least 3,000 interviews in 10 different countries, including almost 500 in Delhi, Bangalore and Mumbai. They want an urban, manoeuvrable, nimble bike and dark kind of styling and that has driven the design of the Street.
Hasn’t this been a cultural shift at Harley from making big, bulky bikes to sleek ones like Street?
It’s an indication of how our markets are changing. We have become more global. Last year we reached a milestone where the number of our international dealers are more than the US dealers. That’s a huge change from the earlier position. Street is a reflection of change in target markets. But it has not changed our mindset. Our mindset has always been customer-led.

Will you be doing complete manufacturing of these bikes in India?

It’s beyond CKD. We are in a good place from the capacity point of view unless the market changes dramatically in 2-3 years.

What kind of volumes do you expect from Street?

We will be entering a new price segment with Street 750, which will be under Rs.5 lakh on-road price. We will announce the final pricing at the Delhi Auto Expo. We think it will be a game-changer for us because it will target a much broader segment.

At this price, you will attract some Royal Enfield customers, too.

Well, we have always considered Royal Enfield buyers as future Harley riders. So, that’s natural. With Street 750, we will make Harley more affordable to them.

Street 500 will be entry-level bike on the pricing front.

Yes, as and when we bring the bike here.

Any plans to make a bike in the range of 250-300cc?

No, not at all. There have been some rumours going around but all of those are completely made up.
Any plans for exports?

We will be exporting from Bawal (in Haryana) to international markets. We will be exporting to Portugal, Spain and Italy.

What will be your annual production target for the Street series?

Between Indian and the US plant, we should be producing in the range of 7,000 and 10,000 units every year.

Festive boost to Honda sales

Honda Motorcycle and Scooter India, the country's second largest two-wheeler manufacturer, has clocked record breaking sales of 4.56 lakh units this festive season, despite the overall market sentiment being dull.
The company registered a 70 per cent growth in sales during the festive period this year, when compared to sales in the same period last year. On the day of Dhanteras alone the company managed to sell 80,000 units further boosting its performance.

One of the major contributors to Honda's sales has been the Dream Neo, for which the company has clocked sales of over 1 lakh units within four months of its launch.

This is the most crucial period for auto companies in the entire calendar and we are really pleased to receive overwhelming sales results. We attribute this success to our strategy of network expansion in tier 2-4 towns together with the scooter capacity expansion and also response to mass segment Dream Series motorcycles,” said Y.S Guleria, President at HMSI, in a press release.

Honda's challenge to market leader and former partner Hero is becoming more evident every month as the company defys the overall market sentiment and posts strong growth. The company is now looking to capitalise on the rural markets to power its growth in India.

Hero has long dominated the rural two-wheeler scene, and rural sales make up over 48 per cent of the company's overall sales. Honda, though having just two years of experience in this market and only recently having launched the Dream Neo is doing well to compete with Hero.

Honda's blockbuster sales are also credited to the fact that they are leaders of the scooter market in India, controlling almost 50 per cent of the market. Scooters have been the only segment in the Indian auto industry that have been able to buck the trend of slowdown.

HMSI announces association with cycling event

 Honda Motorcycle and Scooter India (HMSI) on Wednesday announced its association with 'Tour de India (TDI) 2013-, a cycle racing event to be held in the country next month. Honda's CBR 250R is the official lead bike for the TDI 2013 races which will be hosted on 15, 17 and 22 December 2013 in Mumbai, Jaipur and Delhi respectively, HMSI said in a statement. "We are proud to be associated with an initiative like Tour De India. Honda CBR250R is one of India's favorite and most awarded sports bike, and it would complement the racing enthusiasts participating in Tour de India 2013," HMSI Vice President - Sales and Marketing Y S Guleria said.

The overall winner of TDI would be rewarded with a CBR 250R at the end of the tour, the company said. TDI is India's first and largest international cycling event which aims to promote cycling as a sport in India. "Panned across three cities, by associating with Tour de India 2013 Honda connects with the youth and urban affluent population of the country," the company said.

Hero to ride into US next summer

Hero MotoCorp to roll out two-wheelers in United States

NEW DELHI: Come next summer and Hero MotoCorp will roll out its two-wheelers in the United States and Canada in perhaps the most ambitious move in the top Indian bike-maker's race to become a global player.

Hero has appointed its American technology partner Erik Buell Racing as the exclusive distributor and plans to eventually set up manufacturing and assembly plants in the North America in due course, a top trade insider privy to the development told ET.

A "soft launch" of Hero two-wheelers was held last month at the inaugural American International Motorcycle Expo (AIMExpo) in Orlando, Florida, where Hero displayed some of its popular brands such as Hunk, ZMR, the updated HF Deluxe Eco, Splendor Pro and the Pleasure scooter, the person said on condition of anonymity. "Specific details on the range to be offered and pricing details have yet to be determined," the person said.

Pawan Munjal, managing director and CEO at Hero MotoCorp, confirmed to ET last week that a soft launch of its debut products has been made in the US.

At AIMExpo, EBR had issued a press release that quoted Munjal as saying: "EBR will be distributing Hero motorcycles in the United States and Canada on an exclusive basis starting summer of 2014."

When contacted, the Hero MotoCorp spokesperson said it's too early to share any specific information in this regard. "We will make an official announcement at an appropriate time and will share our plans for the North American market at that time," the person said.

The person quoted earlier said the company is exploring the possibility of setting up assembly units in North America. "If the volumes are good, then it does make business sense to assemble the products locally," the person said. In an interaction after announcing the purchase of a 49.2% equity stake in EBR, Munjal had told ET that the US market holds promise for Indian two-wheelers.

"While the US is primarily seen as a market for heavier bikes, I am convinced that smaller two-wheelers in the range of 100cc to 250cc can also be successful in the US and other North American markets," he had said. "Our fully-owned new overseas subsidiaries such as the one in the US and in the Netherlands will play important roles in our future overseas acquisitions and investments."

The American two-wheeler market is dominated by big bikes with over 600cc engine displacement. Harley Davidson, Ducati, BMW, Triumph, Yamaha and Honda are the main competitors in the market. Hero is investing $25 million for acquiring EBR stake through its newly incorporated and wholly-owned American subsidiary HMCL (NA). It has already invested the first tranche of $15 million.

  "This equity partnership was the first definitive indication of Hero's intentions to explore the North American markets," the person quoted earlier said. Munjal is personally driving the new products agenda at Hero and has given a clear brief to the R&D team to develop new models for global customers, the person added.

Since charting its solo journey in 2011, Hero has been expanding its global footprint. It has already commenced its operations in new markets such as Guatemala, El Salvador and Honduras in Central America, Peru in Latin America and Kenya, Burkina Faso and the Ivory Coast in the African continent. It has set up its first Africa assembly plant in Nairobi, Kenya.

Trendy & comfortable

Honda has now emerged as India's second-largest two-wheeler manufacturer. While the company's success is primarily attributed to the sales of its scooter Activa and its 110cc motorcycle, the Dream Neo, the 150cc segment cannot be discounted. Honda now wants to have a strong presence in this segment too and has launched the CB Trigger. We find out how good the new bike is.

First, a little backgrounder. The 150cc-180cc motorcycle segment contributes about 10% to the Indian two-wheeler industry and, more often than not, has been ruled by Bajaj. Honda is present in this segment in the form of the CB Unicorn (for mature commuters) and the CBR 150R (for riders who desire an exciting motorcycling experience). But Honda needed something that could appeal to riders aged between 18-24 years, and that, while fun to ride, was also suitable for daily commuting. That's where the CB Trigger fits in.

Design

The CB Trigger comes with a contoured tank having a 3D Honda emblem, floating side cowls and arrow-shaped side panels that contribute to its aggressive looks. It has got an all-black sporty muffler that emphasises the muscular character of the bike. Then you have all-black alloy wheels and a digital instrument panel. The front headlight comes with air scoops on the visor and there is an LED rear tail light. Overall, although the CB Trigger looks good, what we would have wanted is a bike that really stands out in the crowd.

Technology

The CB Trigger comes with a segment first feature—the Combi Brake System, an easy to operate feature that, Honda claims, reduces braking distance by 32% compared to conventional braking. Then the mono-suspension ensures mass centralisation that leads to better stability and riding confidence. It is powered by a 150cc engine that not only runs well in the low- to mid-speed ranges but also performs nicely in high-speed range. The engine produces a maximum power of 14 bhp and a torque of 12.5 Nm. The company claims a mileage of 60 kmpl (based on internal Honda test ride mode that is close to actual city riding conditions).

Ride

The seating position of the bike is upright and the seat is wide enough to give you a comfortable riding angle. While short city commutes are a breeze, like all other 150cc bikes, long-distance riding can go uncomfortable even on this Honda after a time. But if you primarily use motorcycle for urban riding, the CB Trigger won't give you many complains. And the seat, though wide, isn't really long enough to effortlessly seat, say, two fat people. Mention must be made here of the lightweight and flexible diamond frame that offers easy handling and steady control. But perhaps the best thing about the bike is control—the 240 mm front and 220 mm rear dual disc brakes that enhance braking efficiency and rider safety really inspire confidence. Then you have wide tubeless tyres, maintenance free battery and viscous air filter.

A starting price of Rs 67,433 (ex-showroom, Delhi) means the CB Trigger is priced competitively. Although it is not a superlative machine, it is fun to ride, fuel-efficient, and suitable for daily commuting. And three attractive colour options—Meteor Green Metallic, Pearl Siena Red and Black—mean Honda might just have added another winner to its kitty.

‘We want to be a company that society wants to exist’

The president & CEO of Honda Motorcycle and Scooter India shares with Vikram Chaudhary the company’s performance in the recent festive season, why scooters never went out of style, and how Honda plans to make Auto Expo 2014 exciting.

It has been a good year for Honda Motorcycle and Scooter India (HMSI). The monsoon rains have been plentiful, rural markets are seeing increased spending power and this has translated into better two-wheeler sales—a lot of which have come from HMSI,” I prepare notes about the ‘only’ Honda in India as I wait for Keita Muramatsu, president & CEO, HMSI, at the Honda guesthouse in Gurgaon. Wearing a smile that can be attributed to that of a successful man, Muramatsu-san (san is a Japanese honorific) greets me. “Konnichiwa,” I reply.

As we take seats, I congratulate him on HMSI clocking record-breaking sales in the festive season. “We sold 4.56 lakh units in the festive season and 80,000 units on the day of Dhanteras alone. Starting from Dhanteras to Diwali, HMSI registered a growth of 70%, which is our all-time highest festive sales growth. Additionally, our total sales in October 2013 stood at 3,75,741 units,” Muramatsu shares the numbers with me.

“Have these record numbers come both from the scooter and motorcycle segments?” I ask.

“Certainly,” he says, adding, “While our Activa scooter saw sales of over 1.4 lakh units in September, even surpassing those of the country’s best-selling motorcycle, our Dream Neo (the 110cc motorcycle) achieved 1 lakh sales units within four months of its launch.”

“So, both the segments have been winners…” I chip in.

“I would say that Honda has been a winner and our performance shows the growing customer trust and preference for Honda products across the country,” Muramatsu replies, adding: “We also attribute this success to our strategy of network expansion in tier 2-4 towns together with capacity expansion.”

“So, Honda’s USPs today are brand value, product innovation and smart marketing?” I ask.

Muramatsu replies, “You have sort of defined HMSI’s success in India. To these USPs, I would add that we have always tried to keep up with customer demand by having enough and sustained production and, more importantly, we have been ensuring that parts for HMSI products are not only available everywhere but also remain affordable. And then the fact that we have been giving our customers the finest products that can be created in the two-wheeler space.”

“You opened a new technical centre at your Manesar facility this year. Does this mean that India is now emerging as an innovation hub for Honda?” I ask.

“Indeed,” Muramatsu says, adding, “One of our key innovations this year has been the Honda Eco Technology (HET), a technology that has led to our products delivering even better fuel efficiency. In fact, HET is an added value for our customers at no extra cost.”

We move beyond Manesar and I ask him, “You currently have three manufacturing plants in India—Manesar (Haryana), Tapukara (Rajasthan) and Kolar (Karnataka). What is the total capacity of all three?”
Muramatsu replies, “Running at maximum capacity, Manesar can produce 16 lakh vehicles a year, Tapukara can churn out 12 lakh and Kolar 18 lakh.”

I add up the numbers and say, “The total comes out to be 46 lakh two-wheelers a year.”
“That’s right,” he replies.

I ask, “And how many vehicles you sold over the last 12 months?”

“Close to 32 lakh,” he replies.

“So, going by your current speed, maybe in another two years you might touch the 46 lakh mark. What then? Your plants would already be running at their full capacity,” I ask.

Muramatsu smiles. “Although we are fast, the media seems to be faster than us.”

“But you must be scouting for new locations?” I press on.

“You will get to know, there is still time…” he smiles on.

“I must veer a bit and add that our focus in the country is FIF—For India, In India and From India,” Muramatsu says.

“Please elaborate,” I say.

“For instance, at our Narasapura Industrial Area plant in Kolar, almost 89% of the workforce is from Karnataka and 51% of the manpower comes from Kolar district alone. Helping uplift the community around us is the global philosophy of Honda and we want to be a company that the society wants to exist. In Kolar, we also gave one job to each family that contributed land for our factory,” he replies, effectively moving beyond my question on scouting for new locations.

“What is your export policy like?” I too switch.

“Although the recent fall in the value of the rupee against major currencies did help exports, and currently we are exporting 4% of our total volumes, the fact remains that because India itself is a huge market, we first have to focus on the home market rather than looking at foreign shores. In fact, sometimes the domestic demand is so high that we just cannot export enough,” he replies.

“At a time when some two-wheeler manufacturers stopped believing in the scooter story, Honda did, and reaped the benefits. What decisions went into focusing on the scooter market when everyone else was focusing on motorcycles?” I ask.

“Scooters never went out of style, they perhaps had to be reinvented,” Muramatsu smiles. “And we did so by bringing in technological advancements. Today, the gap between the mileage of a scooter and a motorcycle has reduced dramatically. In fact, our new HET technology delivers the same mileage both for scooters and motorcycles. Then, the fact that women have been increasingly showing interest in scooters—some reports show that women today constitute 40% of first-time scooter buyers—has also worked to the success of this convenient mobility.”

“What has been the percentage growth of scooters?” I ask.

“Over the last five years, the CAGR of two-wheeler industry was 14%—while motorcycles grew 12%, scooters grew 23%.”

“So, can it be the case that a company that had earlier exited the scooter market might now want to re-enter the space and give you more competition?” I ask.

Muramatsu simply smiles back.

Auto Expo 2014 is round the corner, so I ask him one final question: “During the Expo 2012, Honda had launched seven new products. So, what do we expect from Honda at the Expo in 2014?”

Muramatsu smiles again and says, “We would like to keep it a surprise, but it will be exciting.”
“Still, any leads?” I ask.

“All I can say is that we have taken one of the biggest areas at the Auto Expo 2014. So, naturally, we will need many products to fill that area. Watch out,” he says.

“Perhaps other two-wheeler companies, too, should,” I think as I take his leave.

Bajaj auto looks to enter Brazil in 18 months

Bajaj Auto, The country's second largest bike maker by volume, is looking at scale up the overseas business further. In the pipeline are plans to enter Brazil, the largest market in Latin America with an annual output of more than 7-lakh motorbikes, over the next 18 months.

“Our strategy is to scale up presence in key markets including Africa and the Latin America. The objective is to grow exports further,” Rakesh Sharma, president — international business, said. “We will move into the Brazil, a key market in the Latin America, over the next 18 months. Right now, we are studying the best options to tackle this market dominated by Japanese player Honda,” he added.

While the company, whose exports account for over 40% of total sales, did not give details of its Brazil foray, sources say it will tie up with Japan's Kawasaki in the region to market its products. Bajaj may also look at setting up its facility in Brazil.

The company already enjoys a healthy geographical spread for its export business. Africa accounts for the largest share by volume at 47%. It is already a market leader in Nigeria, the largest market in the continent, followed by Asia and Middle East at 32%. Latin America, where the company is relatively new, accounts for about 20% of the turnover and has the potential to be as big as Africa.

"Both Africa and Latin America are capable to deliver similar growth and will continue to be our area of focus,” said Sharma.

While Sharma did not give any details on the incremental value that the foray into the Brazilian market will bring for the overall international business, sources said the exports business has the potential to contribute about 50% of the company's total turnover over the next five years.

At present, Bajaj Auto exports to 57 countries with a market leadership in 12 of these, including Nigeria and Colombia. During FY13, Bajaj exported 1,547,157 motorcycles and three-wheelers. This represented a decline of 2.1% compared to the previous year. Though, in value terms, exports grew by 4.1% to R6,713 crore.

"Latin America is still new for us but already a significant contributor. This is because we have a full range of motorcycles and three-wheelers there unlike the African market, which is more utility driven," Sharma noted.
In Africa, the motorcycle major will also look at making a debut in West African clusters where it has a weak presence so far. The company will look at cluster nations including Guinea, Cameroon, Senegal and others for growth.

Hero’s new bikes for a fresh premium bid

Two years before Bajaj Auto's fortune-changing Pulsar150 (150cc) bike rode onto the scene in 2001, India had already got its first sports-oriented, 4-stroke, 150-cc bike from Hero Honda (now renamed Hero MotoCorp). The Hero Honda CBZ paved the way for expensive, superior-performance motorcycles

Despite being expensive (the first to breach a Rs 50,000-tag), the CBZ instantly garnered a fan-following, thanks to a Honda-developed engine and its power, ride and handling features. With a top-speed of 125km/hr, the CBZ was faster than most other motorcycles at that time.

But the trail blazing was short-lived. The CBZ struggled to keep its lead and Hero has not been able to make a mark in the premium segment ever since. Hero's failure in the segments with engines of 150cc and above has been seen as the result of its inability to keep buyers excited and the onslaught of competition.

Bajaj's indigenously-developed premium bike, Pulsar, hit the sweet spot and has not let go of its lead till date. The Japanese two-wheeler giant Yamaha too rejuvenated itself by launching the FZ, Fazer and R15 (all 150cc) after several years of hibernation. Honda (after breaking off from Hero) strengthened its portfolio with the Unicorn (150cc) and the CBR150.

Hero could not repeat in the premium segment the kind of growth it had registered with the Splendor, Passion and the Dawn in the entry segment (100cc-110cc, which comprises 63 per cent of overall bike sales).

Since the launch of the CBZ (now renamed Xtreme) in 1999, Hero has expanded its offering to six premium models, the highest count in the segment. Yet, it has just 15 per cent share by the end of September, according to the Society of Indian Automobile (Siam).

The four 150cc-engine models - the Acheiver, Hunk, Xtreme and Impulse - and the Karizma and Karizma ZMR (fitted with larger engines) comprise Hero's premium portfolio. Impulse, an off-road, dirt bike, was the first it had showcased at London's O2 Arena in 2011. But dealers maintain the Impulse has been one of the slowest-moving bikes under brand Hero.

Senior company executives agree that Hero has failed to grab a larger slice of the premium pie, which is dominated by Bajaj with a share of more than 40 per cent. Hero, more used to the staid needs of the humble economy segment, could do with being more nimble in adapting to the changing demands of the dynamic premium-bike buyer. Anil Dua, senior vice-president (sales and marketing), Hero MotoCorp, says, "New models become very important in the premium segment. Buyer requirements change more rapidly than in other segments".

The need for speed in new premium product launches is the first thing the company is addressing to fare better. Hero will roll out a totally new range of premium bikes in 2014 that it has developed with its partners, EBR (of the US) and AVL (of Austria).

The Impulse will be relaunched with a more powerful variant in the following months, as will the Karizma, Hero's most powerful bike, that will have a substantial face-lift. More will be launched in the category at the Auto Expo in February next year.

"Clearly, we are now unleashing products which are developed wholly by us. If you are not bringing new models in this segment then you are losing out. We were late entrants in the premium market that has become radically dynamic. We have not been able to capture the market but we are targeting a share of 20 per cent," says Dua.

In comparison, Hero has 66 per cent share in the economy segment with six products. While maximum mileage helped it maintain an iron grip on the volume market, consumers chose competition when it came to higher-powered bikes. Though its share of the economy segment has dropped from 85 per cent five years ago, to 3.17 million units, Hero still commands the largest in overall two-wheeler sales.

An analyst says, "Low-cost, high-mileage bikes bring good volumes but profitability is driven by the premium bikes. Hero will have to create a success story in this segment, amidst competition that is higher than ever".

India rapidly rising on Yamaha's horizon

Yamaha’s operations in India have overtaken its business in Thailand, a traditional stronghold for the Japanese two-wheeler maker.

In its third-quarter results declared in Japan last week, the company revealed that sales in India for the July-September period totalled 1.27 lakh units, comfortably ahead of Thailand’s 73,000 units.

Between January and September this year, India has accounted for sales of 3.3 lakh two-wheelers, against Thailand’s 2.84 lakh.

This is a remarkable turnaround from 2012 (July-September) when Yamaha’s India sales were 86,000 units, way behind Thailand’s 1.37 lakh.

Likewise, for the nine-month period (January-September) last year, Thailand had accounted for sales of 4.34 lakh two-wheelers, nearly twice India’s 2.47 lakh.

It is quite likely that another important Yamaha market, Vietnam, may also lose out to India next year.

For the September quarter , Vietnam’s sales were 1.6 lakh units, slightly ahead of India’s 1.27 lakh.

Yet the difference was a lot wider in the September quarter of 2012 when India had reported 86,000 units against Vietnam’s 1.99 lakh.

Even though Vietnam is still ahead by a little over 2 lakh units for the nine months of this calendar (5.64 lakh versus 3.30 lakh), the gap is narrowing rapidly when examined in the backdrop of 2012 (6.33 lakh units of Vietnam against India’s 2.47 lakh units).

For Yamaha, Indonesia rules the roost with sales of nearly 6 lakh two-wheelers for the July-September quarter and 1.87 million for the first nine months of this calendar.

Going by this momentum, the company will wrap up 2013 with sales in Indonesia comfortably crossing 2.5 million.

India could end up being Yamaha’s most important market after Indonesia by 2015-16.

The Indian market is large enough for the company to be upbeat about business prospects even though it has a larger market share in the Southeast Asian region.

For this calendar year, the combined two-wheeler volumes (from all companies) in Indonesia, Vietnam, Thailand and Taiwan are projected to be 13.07 million units, which are still lower than India’s 14 million units.

In its medium-term management presentation plan unveiled in Japan earlier this year, Yamaha drove home the point that India would grow significantly, while ASEAN (Thailand, Indonesia, Vietnam and Taiwan) and Latin America (Colombia, Brazil, Argentina and Mexico) would see steady growth in contrast.

Yamaha has also made known that it is targeting 1 million units in India by 2016, inclusive of exports.

The quality and cost-competitiveness of India’s ancillary supplier base will also allow Yamaha to leverage this benefit for global sourcing.

Come summer, Hero to Gear up for a ride into us

Come next summer and Hero MotoCorp will roll out its two  wheelers in the United States and Canada in perhaps the most ambitious move in the top Indian bike-maker’s race to become a global player.
Hero has appointed its American technology partner Erik Buell Racing as the exclusive distributor and plans to eventually set up manufacturing and assembly plants in the North America in due course, a top trade insider privy to the development told ET.

A “soft launch” of Hero twowheelers was held last month at the inaugural American International Motorcycle Expo (AIMExpo) in Orlando, Florida, where Hero displayed some of its popular brands such as Hunk, ZMR, the updated HF Deluxe Eco, Splendor Pro and the Pleasure scooter, the person said on condition of anonymity. “Specific details on the range to be offered and pricing details have yet to be determined,” the person said.

Pawan Munjal, managing director and CEO at Hero Moto-Corp, confirmed to ET last week that a soft launch of its debut products has been made in the US.

At AIMExpo, EBR had issued a press release that quoted Munjal as saying: “EBR will be distributing Hero motorcycles in the United States and Canada on an exclusive basis starting summer of 2014.”

When contacted, the Hero Moto-Corp spokesperson said it’s too early to share any specific information in this regard. “We will make an official announcement at an appropriate time and will share our plans for the North American market at that time,” the person said.

The person quoted earlier said the company is exploring the possibility of setting up assembly units in North America. “If the volumes are good, then it does make business sense to assemble the products locally,” the person said. In an interaction after announcing the purchase of a 49.2% equity stake in EBR, Munjal had told ET that the US market holds promise for Indian twowheelers.

“While the US is primarily seen as a market for heavier bikes, I am convinced that smaller twowheelers in the range of 100cc to 250cc can also be successful in the US and other North American markets,” he had said. “Our fully-owned new overseas subsidiaries such as the one in the US and in the Netherlands will play important roles in our future overseas acquisitions and investments.”

The American two-wheeler market is dominated by big bikes with over 600cc engine displacement. Harley Davidson, Ducati, BMW, Triumph, Yamaha and Honda are the main competitors in the market.

Hero is investing $25 million for acquiring EBR stake through its newly incorporated and whollyowned American subsidiary HMCL (NA). It has already invested the first tranche of $15 million.

“This equity partnership was the first definitive indication of Hero’s intentions to explore the North American markets,” the person quoted earlier said. Munjal is personally driving the new products agenda at Hero and has given a clear brief to the R&D team to develop new models for global customers, the person added.
Since charting its solo journey in 2011, Hero has been expanding its global footprint. It has already commenced its operations in new markets such as Guatemala, El Salvador and Honduras in Central America, Peru in Latin America and Kenya, Burkina Faso and the Ivory Coast in the African continent. It has set up its first Africa assembly plant in Nairobi, Kenya.

In his ‘Vision 2020’ for the company, Munjal wants Hero twowheelers to be available in as many as 50 countries across the world by 2020. 

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