Anil Dua quits Hero MotoCorp

Anil Dua has quit as Hero MotoCorp's head of sales and marketing. He is likely to take up an assignment abroad. Mr Dua had joined the company (it was called Hero Honda then) in September 2006 from Hindustan Unilever. That was the month Bajaj Auto came within inches of dislodging the Munjal flagship from the top of the motorcycle market. There was panic in the company. If it was overtaken by Bajaj Auto, its brand equity would suffer serious erosion. The Munjals, to their credit, decided the time had come to focus on market share instead of profits or else there would, one day, be no profits to protect. Amongst the first things they did was get Mr Dua on board.

And that is when the company developed marketing savvy. At that time, it was the convention to split the motorcycle market into three segments: entry level (100 cc engine capacity), executive (125-135 cc) and premium (150 cc). Mr Dua's research showed that buyers looked not at the engine capacity but at the holistic experience - the imagery associated with the motorcycle. Motorcycles with the same engine capacity could talk to different customers. Also, the three segments weren't watertight: consumers moved easily between them. Hero then decided to look at the market from the consumer's point of view: how he brackets the motorcycles in the market. Focus shifted from the overall brand to individual motorcycles. Out went the Hero punch line of "Fill it, shut it, forget it" and in came new ones like "Always game" (for the Karizma) and "Thinking is such a waste of time" (CBZ Extreme).

Consumer research, of the kind that is carried out in the fast-moving consumer goods industry, started being done at Hero. Specialists were hired to talk to thousands of customers every month to gauge brand health. Backed with the knowledge that the target customers (aged between 18 and 35) relate to cricket, music, movies and adventure, a new communication strategy was adopted. Hero roped in film stars Hrithik Roshan and Priyanka Chopra as brand ambassadors, joined the Indian Premier League bandwagon and got associated with TV programmes like MTV Roadies.

In mid-2007, consumer finance companies began to pull the plug on two-wheelers, due to the sharp rise in bad loans. They overnight withdrew their representatives from motorcycle showrooms. As almost 70 per cent of all motorcycle purchases were on monthly instalments, this hit the industry hard. But Hero sales were flat. This brought home the realisation that it had a strong customer base in villages, where people do not buy motorcycles on instalments. Hero could leverage its strong brand equity in the rural markets to sell more. Thus, in 2007, the company set up its rural sales vertical under Mr Dua. Five hundred salesmen were co-opted for the initiative. They were given work targets and not sales targets: they had to fan out into villages and talk to decision-makers. Their waves were launched each harvest - when farmers have money in their pockets. Today, the rural market contributes almost half of the company's sales.

Hero was thus able to stave off the challenge from Bajaj Auto. In fact, the challenger corrected course and decided to focus on profits and not market share. (Today, Bajaj Auto is the country's most profitable two-wheeler company.)

This greatly boosted the confidence of the Munjals. It came in handy in 2011 when Honda decided to end the partnership with them. They had to decide fast. The Munjals formed a team of three - of which Mr Dua was a part - to assess if life was possible without Honda. This team couldn't have done open research, because that would have spilled the beans on Honda's departure. It, therefore, had to rely on gut feel. It noted that Honda had launched motorcycles on its own in 2006 and yet had a market share of only 7 per cent, while Hero scooters, which were also launched in 2006, had grabbed a share of 17 per cent (Honda was, and still remains, the undisputed leader in scooters). It was, therefore, decided to stay put in the market. Technology was equal for all and Hero could deliver everything the Indian buyers were looking for: low price tags, high fuel economy, inexpensive spares and good resale value.

The Munjals had the option to use the Hero Honda brand till June 2014, but they decided to replace it as early as possible. As it involved renewal, the project was codenamed Yajna. Wolff Ollins, an Omnicom company, was engaged to give the company a new identity. It came out with the name Hero MotoCorp. It was international sounding and did not confine the image to just two-wheelers. Law & Kenneth was hired to craft the new communication strategy. It came up with the line, Hum main hai Hero (There is a Hero in us). Lyricist Irshad Kamil expanded it into an anthem; A R Rehman set it to music; and Anurag Kashyap made it into a film. To unveil the new identity, the Munjals chose London because it is a blend of tradition and modernity. The dealers who were flown to London for the purpose came back impressed.

Hero (it still operates from a cramped commercial complex in south Delhi because the Munjals are superstitious about it, though the shareholders like the fact that money hasn't been spent on a fancy office) is still the market leader with a 41.3 per cent share of the market in 2013-14. Its biggest challenger is Honda (24 per cent). It is gaining market share at a fast clip. Hero will have to use all the marketing muscle it has gained in the last eight years for this fight

Advertisers see jump in reach and rating in IPL.

The number of advertisers with the Indian Premier League (IPL) might have dropped to 60-70 from last year's count of 100, but that does not set off alarm bells for media planners. They put it down to the fewer matches this year, as well as the change in the venue due to elections.

Rohit Gupta, president, MSM, whose channels aired the finale on June 1, says, "The IPL is a property much like the English Premier League or the NBA. It is not going anywhere, and will continue grow. What you see at IPL is the best of T20 cricket. Which is why, despite the controversies every year, IPL continues unscathed."

According to Gupta, after the first 51 matches, IPL reached 183 million viewers this year, versus 176 million viewers last year. Sony is understood to have earned ad revenues of Rs 850 crore, equal to its last year's earnings. But that does not vindicate the naysayers as the ad inventory was lower this year: Sixty matches versus 76 last year.

Not only did e-commerce players spend Rs 100 crore on the IPL, there were new sponsors too. Gupta says, "Marico, Perfetti and TVS joined us."

R S Sodhi, MD, Gujarat Co-operative Milk Marketing Federation, the owner of Amul, says, "IPL is a property that is watched by so many people across age-groups that an advertiser cannot ignore it." After initial hiccups following the venue-change and legal hurdles, Amul has advertised on IPL this year. Manish Sharma, MD, Panasonic India, says, "This time we advertised air conditioners and smartphones and got a good response. It was a wise
decision to have spent on IPL despite not being sponsors this year. For the last three years, we sponsored Delhi Daredevils, which gave us visibility on air, ground, in-stadia. The quality of the matches were good this year."

IPL's ad rates in 2014 were almost 10-12 per cent higher than last year's, with nothing less than Rs 4.75 lakh per 10 seconds. This is the average rate during the entire tournament.

A Vijay Narayanan, vice-president, marketing, Havells India, says, "Consistent ratings across 60 days is the reason why we have been associated with IPL (as a sponsor) for the last seven seasons. No other programme offers this consistency. Havells launched 14 new ads during the IPL season (over the years), including the recent 'Respect for Women', Hawa Badlegi and Shock Laga earlier. Ratings and reach have seen a 3-4 per cent jump this year, which is incredible given that the first 20 matches were held outside India, and there were elections and legal tangles."

A PepsiCo India spokesperson says, "It is a key platform in the middle of the season that allows us to explode our marketing calendar, activate consumer promotions and initiate on-ground activities."

Triumph eyes three-fold jump in sales in two years.

British cult bike maker Triumph is aiming for three-fold increase in its sales in India targeting to sell around 2,700 units in two years.

The company, which launched operations in India last year, has sold 450 units and expects to touch the 500 mark by the end of this month.

"We expect to sell a total of around 1,200 units in 2014 -15 and looking to retail 1,500 units in 2015-16," Triumph Motorcycles India Managing Director Vimal Sumbly told reporters here.

The company, which today opened its first dealership here in North India, aims to take the number of outlets to around 12 by March 2016.

"This (Delhi) is our seventh outlet in the country. We will close the year at 9 dealerships. By 2016 we are looking to have 12 outlets," Sumbly said.

The next dealerships would come up at Chennai and Kolkata respectively, he added.

The prices of the company's 11 models in Delhi will range from Rs 5.68 lakh to Rs 20.08 lakh (ex-showroom).

The company, which is present in India through a wholly- owned subsidiary, had expanded its product portfolio with the launch of 'Daytona 675' during Auto Expo in February, taking the total number of models launched in India to 11.

Last November, the company had entered the Indian market with the launch of ten models.

Triumph assembles the Bonneville T100, Daytona 675R, Street Triple, Speed Triple and Thruxton in India at its facility in Manesar.

The rest of the bikes, Rocket III Roadster, Tiger Explorer, Tiger 800 XC and Thunderbird Storm are imported into the country as completely built units (CBUs).

Triumph is the largest British motorcycle manufacturer and has more than 740 dealers across the world.

Hero Moto's savings may 'Leap' to Rs.1k cr this fiscal.

Margin transformation programme & end to Honda payments to boost co's coffers Co has completed a pre-production run at Neemrana plant and expects the plant to be fully operational by the end of June
Hero MotoCorp looks poised to save close to 1,000 crore in the financial year 2015 with its ongoing margin transformation programme yielding desired results, and the ammortised payments to former partner Honda coming to an end in June.

Pawan Munjal-led Hero is aiming to more than double its savings to over ` . 300 crore in fiscal 2014-15 from the previous financial year as part of its margin transformation drive 'Leap', started a few years ago. “We accrued more than ` . 150 crore in the financial year 2013-14, which is going to increase progressively. We have already come to a stage where, effective April 1, 2014, the monthly accrual was ` . 25 crore. So, all other factors, such as volatility in commodity market and the currency fluctuation remaining constant, we expect over ` . 75 crore to be added to the bottom line per quarter in FY15,“ Ravi Sud, senior vice-president & chief financial officer at Hero, told ET.

“And it will keep growing as we go on implementing the ideas at different points of time. The exit run rate for FY2015 could be anything between ` . 50 and ` . 60 crore. It's too early to say, but we are working on it,“ he added.

So, even by a back-of-the-envelope calculation, it means a straight savings of ` . 300 crore for the company in FY15.

Taking April 2013 as the base, Hero MotoCorp had launched the 'Leap' programme in May 2013 with a view to transforming its margins over a four-year period. The programme looks at a wide gamut of areas, including pricing and feature optimization, raw materials consolidation, outbound logistics, operational excellence and marketing expenditure, e-sourcing and product design.

In addition, Hero stands to gain big with the last of the 14 installments of the amortized payments to erstwhile partner Honda coming to an end in June.

“The one-time lumpsum payment of 45 billion Japanese yen to Honda was amortised into 14 quarters, and the last installment will be paid in June. While it may not have any impact on the EBIDTA of the company, it will still positively impact our EPS (earnings per share). And the positive impact on PAT for the period July 2014 to March 2015 will be around . 440 crore net of tax,“ Sud said.
` The actual impact of this, therefore, is . 600 crore in savings. So, this likely to be ` along with the 'Leap' benefit put together, will accrue in total savings of close to . 1,000 crore for Hero ` MotoCorp in FY15. MotoCorp in FY15.

The company is also moving rapidly to scale up its capacity from its current 6.9 million units to close to 9 mil lion per year. “We have already completed a pre-production run last week at Neemrana and plan to start trial pro duction this month, and expect the plant to be al by the end of June. As far fully operational by the end of June. As far as the fifth plant (at Halol in Gujarat) is concerned, we have started building a boundary wall and our expectation is it will take 12 months for the plant to be ready . I would say by the end of the second quarter (September 2015), the Gujarat plant will also be operational,“ Sud added.

Neemrana will commence production with a capacity of 750,000 units while the plant at Halol in Gujarat will have an installed capacity of 1.2-1.5 million units of two-wheelers.

Hero on Monday reported 8% growth in sales in May and its highest-ever non-festive monthly sales of 6,02,481 units. Hero MotoCorp's shares closed at an all-time high of ` . 40.7.

Jupiter expands TVS' orbit in scooters.

In September, 2013, when TVS Motor Chairman and Managing Director Venu Srinivasan launched the company's new scooter, Jupiter, he had said that just as the name suggests, it would be the biggest scooter in terms of performance. The company, atleast, has had a smooth ride on the Jupiter.

TVS' market share in two-wheelers, which was around 21 per cent in 2010-11 had gone down further to 12.3 per cent in 2012-13. But analysts say that TVS has gained 1 per cent by dint of sales of the scooter.

In 2013-14, the total scooter market stood at 3.6 million units. The market leader continues to be Honda (52.8 per cent), followed by Hero (19.2 per cent) and TVS Motor (13 per cent). It was in 2011-12 that TVS lost the second place to Hero.

Yaresh Kothari, automobile analyst at Angel Broking, says scooter sales reported a growth of around 20 per cent. The segment contributes around 24 per cent to the overall two-wheeler sales.

In 2013-14, TVS' motorcycle sales increased to 786,000 units, from 756,000 units a year ago. Scooter sales in the same period increased from 446,000 units to 474,000 units.

K N Radhakrishnan, president and CEO,TVS Motor, says, "Jupiter is doing well and the company had sold around 100,000 scooters since its launch in September."
Between Jupiter and Wego, the company had initially planned a capacity of 25,000 units a month, which was revised to 45,000 units a month. The overall capacity of the company is around 2.8-3 million two-wheelers. Experts point out that the higher  capacity utilisation was a result of the launch of Jupiter.

The company would also be increasing its manufacturing of scooters to 75,000 units a month, with the launch of the new Scooty Zest, says Srinivasan. The Scooty Zest is expected to be launched in the first quarter of 2015 and a refreshed version of the Wego in the second half of 2015.

Kothari says Jupiter's launch was important for TVS, considering it was losing out to Hero and Honda, and especially Hero, which has the Maestro and Pleasure that have done well.

TVS' scooter volumes recorded a growth of around 60 per cent in May, 2014, according to the Society of Indian Automobile Manufacturers.

"We expect the company to continue reporting improvement in its performance going ahead, given that its new scooter launch, Jupiter, has been accepted well by the markets.  The new Scooty will help it to continue the growth momentum, though it may not increase the market share substantially," says Kothari.

"The key aspects are building the brand and positioning the product," says Kothari, noting that while Jupiter and Maestro have been positioned as rides for men, Honda's Activa is yet to be differentiated on such lines. But that has not dented Activa's appeal, and it recently pipped Hero's Splendor motorcycle as the highest-selling two-wheeler.

Apart from Hero and Honda, Suzuki and Yamaha too are expected to step up the pressure on TVS.

Recently, Suzuki strengthened its scooter portfolio by launching the 110-cc Lets. Ichiro Kondo, president, sales and marketing operation, Suzuki Motorcycle India, has set a target to capture 10 per cent market share in scooters. He says that while TVS is an established player with the edge of a local brand, Suzuki's USPs are technology and comfort. Kondo has also indicated that it would step up brand-building.

TVS, then, is gearing up to spend more on advertising. Today, TVS spends around 5 per cent of its turnover on advertising, as compared to Hero's 2.2 per cent and 1.4 per cent of Bajaj (albeit on much larger revenues), say analysts. They say that quantum-wise, TVS' spends would either be at par or slightly lower. For instance, while TVS had spent around Rs 460 crore on brand building, Hero spent around Rs 470 crore.

TVS has incurred a standalone capital expenditure of Rs 250 crore in 2013-2014 towards capacity expansion, new product launches and R&D spends and plans to invest a similar sum in the current fiscal.

Analysts expect the new launches, coupled with the success of the Jupiter, will enable TVS to register a volume growth of 8 per cent over 2014-2016

Hope on new Govt revs up auto sales in May

Most automakers reported better domestic sales in May on an annualised basis, led by positive customer sentiments, especially towards the end of the month, after the formation of a new Government at the Centre.

Two-wheeler companies continued the growth trend, with market leader Hero MotoCorp reporting May as its highest-ever sales month for any non-festival period.
Passenger cars

In the passenger cars segment, market leader Maruti Suzuki India, Hyundai Motor India and Honda Cars India reported more than 10 per cent rise in sales compared with the year-ago period.

While Maruti Suzuki sold 90,560 units in May against 77,821 units a year earlier, Hyundai sold 36,205 units against 32,102 units in May last year. Honda’s sales grew 18 per cent to 13,362 units in May against 11,342 units in the year-ago month. New launches such as Xcent (Hyundai) compact sedan and the diesel variant of Honda City helped these companies improve sales.
Ford India

Ford India’s sales grew 51 per cent to 6,053 units in the domestic market compared with 4,002 units last year.

Toyota Kirloskar Motor (TKM) saw its first positive month this calendar year, backed by normalcy in its production and two new launches — Etios Cross and the all new Altis—last month.

The company sold 13,230 units in May (12,502 units a year ago), registering a growth of 6 per cent.

“We have received a good response for the new launches. We started dispatching the new models in May and have registered sales of 555 units and 548 units of Etios Cross and Corolla Altis, respectively,” said N Raja, Director and Senior Vice-President, Sales and Marketing, TKM.

However, General Motors India and two home-grown companies – Tata Motors and Mahindra & Mahindra – continued to see fall in sales.

While GM’s sales declined 43 per cent, Tata and Mahindra saw 17 per cent and 19 per cent drop in sales, respectively.

Commercial vehicles sales of Tata and Mahindra were also in the negative spot.
Two-wheelers

In the two-wheeler segment, while Hero MotoCorp sold 6.02 lakh units last month (5.58 lakh in May 2013), Honda Motorcycle and Scooter India sold around 3.56 lakh units (2.29 lakh units).

Pulsar maker Bajaj Auto’s sales rose 3 per cent to 3.13 lakh units in May (3.04 lakh units). Similarly, TVS Motor, Suzuki Motorcycle India, and Yamaha Motor India saw growth in sales 

TVS eyes bigger pie

Two-wheeler manufacturer, TVS Motor Co Ltd today expressed the hope that double digit growth in two-wheelers would continue at least for another 3-4 months.

"In the last few months two-wheeler segment was growing at double digit and the trend will continue at least for another 3-4 months," TVS vice-president, sales J S Srinivasan said here.

Most auto companies had registered sharp growth in sales in May. Replicating the trend TVS also registered 27 per cent jump in sales over the corresponding month last year.

Srinivasan said the company was trying to increase market share in commuter or economy segment motorcycles from six per cent to double digit.

"Our market share in premium motorcycles and scooters is 13-14 per cent so we have immense scope to increase our share in the commuter segment of two wheelers." he said.

The company was aiming high with its new Star City plus that would replace the existing Star City model.

Star City and Sport, were in the commuter segment (up to 110cc).

"We are aiming to increase our sales to 45000 from 33,000 units per month in the next few months," Srinivsan said.

"We want to promote these two models and not propose any more models in this segment at least for the next two years," Srinivisan said.

TVS, claimed it commanded a market share of 13 per cent in the two-wheeler category in the country.

Harley Davidson rides on the fast lane with India-built bike.

Iconic cult bike maker Harley-Davidson has hit the sweet spot with its model 'Street 750', that is built in India, accounting for nearly 60 per cent of its April sales in the country within the first month of starting deliveries.

The company, which is present in India through a wholly-owned subsidiary Harley-Davidson India, had launched the Street 750 priced at Rs 4.1 lakh in February and opened for bookings in March.

According to the Society of Indian Automobile Manufacturers (SIAM) data, the model clocked sales of 210 units in April this year out of total 361 bikes sold by the company last month.

Harley-Davidson India had sold 146 units in the same month last year. At present the company sells 13 models, including the Street 750, which is its most affordable model in India and is built at Bawal plant in Haryana, with price ranging from Rs 4.1 lakh to Rs 29 lakh. The company produced a total of 506 units of the Street 750 last month.
As per SIAM data, the company sold a total of 126 bikes in the country in March, which is without the Street 750 model.
Last year the company had announced that it would start full-scale 'building' of motorcycles in India from where it will also start exporting to Europe and South East Asian market.

Harley-Davidson Motor Co President and COO Matthew Levatich, however, had stressed that the local 'building' of bikes in India would be restricted only to the Street 750 and Street 500 models. He had also stated that local fabrication of fuel tanks and fenders would also commence in India with the two models, scaling up the company's production operations to almost full scale manufacturing from the earlier assemble operations.

Since early 2011, Harley-Davidson has been assembling motorcycles in India at its completely-knocked-down assembly unit at Bawal catering only to the market here.

Now, scooters rule sales & roads.

They are light, stylish, unisex, multiple usage, and they bucked the slowdown. The ever-so-convenient scooters are now the darling of the two-wheeler industry. And, increasingly, they are replacing motorcycles on urban roads.

The scooter success story in India has seen some hairpin bends going from nearly 50% of the market in 1996 to just 12% around 10 years later. Now, less than a decade on, scooters comprise 28% of the two-wheeler market and every manufacturer in the fray is looking for niches to plug with their scooter launches. Auto industry experts say the city-hinterland divide between scooters and motorcycles is one of the reasons for their growth difference. The motorcycle's dominance over all roads, urban and rural, is clearly over.

TVS Motor chairman Venu Srinivasan said: "We have already started to see big cities favouring the scooter. While motorcycles will continue to grow, it will become a bigger semi-urban mode of transport." The scooter's popularity in bigger cities and in states like Maharashtra, Gujarat and Karnataka has to do with product USP and appeal. A multiple usage product, it is favoured by both men and women and it is in states that have a larger percentage of working women, better roads and higher social indices that scooters ers typically do well.

Y S Guleria, V-P-sales and marketing, Honda Motorcycle & Scooter India (HMSI), said, "Scooters depend on markets with better literacy, awareness and infrastructure. That's why it's a predominantly urban product but in the future, the contribution of rural markets will improve and we are looking at the scooter's urban skew as potential to improve rural contribution."

Guleria should know. HMSI, with nearly 2 million units in sales in FY14, is the clear leader in the scooter market. Its Activa is the second largest selling product in the two-wheeler mart, higher than Hero's long-standing best-seller Passion and second to its stablemate Splendor. Currently, 53% of HMSI's sales are scooters while 47% comes from motorcycles. Part of the urban skew in scooter has to do with the way its demand curve revived when HMSI introduced the Activa.

"We began with just 50-60 dealers and they were naturally focused on urban markets," said Guleria. "But now we have 800 dealers we are pushing forward into tier-2, tier-3 cities as well as rural markets. As accessibility improves, so will brand visibility and demand from rural markets."

Of course, it will take some time for rural India to come up with the kind of numbers that scooters now tot up in cities. "At present, scooters are 75-80% urban and 25-20% rural sales," said Atul Gupta, V-P-sales and marketing, Suzuki Motorcycle India. "The success of scooters is now a 10-year-old phenomenon so the penetration levels are slowly moving into semi urban and rural markets as well." Suzuki launched its 110 cc scooter Let's earlier this week - among a clutch of launches planned by nearly every two-wheeler manufacturer in the segment. "The scooter market saw 12-13% growth last fiscal but this year it will slow down a bit to around 7-8%. "We are looking to sell around 10,000 units of the Let's per month to start with," said Gupta. "Currently 70% of our total sales are scooters and 30% motorcycles."

Part of the allure of the scooter, say industry experts, is that it is a multiple or co-usage product. Both women and men in the family can share the vehicle and it is lightweight, fuel efficient and easy enough to drive around. "Scooter sales took off when the new range of scooters offered features, technology and mileage like the 110 cc commuter bikes," said Gupta. "But penetration levels in major urban markets are gradually going up so it's just a matter of time before marketers look to rural India for incremental growth."

Honda plans another bike in volume segment.

 Honda, the biggest Japanese two-wheeler brand in India, is keen on expanding its portfolio of entry motorcycles with a planned addition in the coming weeks even as former partner turned rival Hero MotoCorp moves to fortify its market.

Honda Motorcycle and Scooter India (HMSI), the country's third biggest two-wheeler producer, will add a new bike under the Dream series brand shortly which will be its third such product in that segment, sources said.

Sales under the Dream series (comprising Yuga and Neo) more than doubled last financial year helping HMSI to grow 36% to 3.6 million units. Honda's Dream series grew 116% to 5.65 lakh units compared to 2.61 lakh units sold in 2012-13.

The entry bike segment (upto 110cc) is a 6.8 million units a year market commanding a share of 65%. Though the segment grew just four% last year no manufacturer is ignoring it considering its size.

When asked if Honda would expand its product portfolio in the economy segment Y S Guleria, vice president (sale and marketing), HMSI said, "Keep your expectations high, we will explore more".

Entry bikes have a huge following in the rural markets where fuel efficiency influences purchasing decisions. These bikes are capable of delivering mileage of more than 60 kilometers per litre (kmpl) on an average going upto 85 kmpl.

Delhi-based Honda is thus increasing its focus on the entry level segment so much so that it has put the potential launch of a big engine premium concept bike on the back burner. The CX-01, a off and on road performance bike, which was unveiled at the Auto Expo was scheduled to go for 'fine tuning' before readying it for launch in 2015 or 2016.

The CX-01 is the first bike developed entirely by HMSI's own engineering division also based in India. However, HMSI has instead opted to put more focus on the Dream series for coming period and expand its reach in the rural areas which will host two-thirds of Honda's 1,000 new sales outlets planned this year.

Sensing trouble market leader Hero MotoCorp launched last month yet another variant of its top selling bike Splendor. Called the Splendor iSmart the bike gives more mileage with an 'intelligent' engine which switches off automatically during idling.

Hero presently commands a market share of 66% in the entry level segment with ten models under its fold. Bajaj Auto is the second biggest player with a share of 17% followed by HMSI with a share of 9% and TVS Motors with a share of 5%.

In March Honda's scooter Activa became India's biggest selling model in dethroning the Hero Splendor in the upto 110cc engine category.

One of the other reasons for the shift could be the tepid response HMSI has received for the CBR250, a 250cc performance bike. Last year it sold an average of 640 bikes a month compared to its earlier sales of more than 1,200 units a month

Cruising, not so smoothly - Suzuki Motorcycle India

Just a day after its erstwhile joint venture partner, TVS Motor launched a new motorcycle in Chennai and said its immediate focus will be on the motorcycle segment, Suzuki Motorcycle India (SMIL), a subsidiary of Suzuki Motor Corporation, Japan, chose the same city to unveil its new scooter.

The new product, Let’s, a 110 cc scooter, is targeted at the urban youth. The company hopes to sell around 10,000 Let’s scooters a month and is confident the new model will strengthen its presence together with its existing models, Swish and Access, in the Indian market.

“Suzuki is keen on providing value products for all Indian customers, where Swish and Access have been long-term favourites. Now Let’s will further strengthen our product presence in the category,” Atul Gupta, executive vice -president, SMIL said on Tuesday.

According to him, Let’s is a stylish scooter for the urban Indian youth, who are seeking trendy products that offer unmatched value. “Let’s is powered by SEP (Suzuki Eco Performance) engine technology that offers top class fuel efficiency without compromising power and performance,” he observed.

The company, which has priced Let’s at Rs 46,925 (ex-showroom Chennai), is hoping to sell around 10,000 units and will focus its attention on the urban people. Overall, the company plans to sell about five lakh units this financial year. This will include 3.7 lakh scooters and close to 1.5 lakh motorcycles. It had sold, 3.7 lakh units in the year 2013-14, comprising 2.7 lakh scooters and about one lakh motorcycles.

Mahindra puts veteran in charge of two wheelers

 His company may have lost market share in its India motorcycle business last fiscal, but Rajiv Bajaj is unfazed. “While it’s true that we have lost four percentage points in the domestic bike market, fiscal 2013-14 has been the best ever in terms of profit in the history of Bajaj Auto,” its Managing Director told Business Line. The company is scheduled to declare its results on May 15.

Foreign markets

“It’s perhaps important to bear in mind that we are a company which goes beyond just domestic market numbers. Ours is a global company whose motorcycles and three-wheelers are doing well in a host of countries,” Bajaj says.

For instance, Bajaj Auto’s market share for motorcycles in Nigeria (where the Boxer is the prime brand) has gone up in the last year from 34 to 44 per cent, while in Bangladesh it is up to 53 per cent (from 46 per cent). Likewise, in Sri Lanka, its market share has moved up from 74 to 82 per cent and in Uganda, from 81 to 88 per cent.

Similarly, the alliance with Kawasaki Motors has seen Bajaj Auto enhance its bike presence in Indonesia and the Philippines. Going forward, the duo will identify more opportunities in the ASEAN region, which includes Thailand, Vietnam, Taiwan and Malaysia. Kawasaki has been Bajaj Auto’s ally for over three decades now.

Likewise, the company will look at growing its global presence with KTM, the Austrian company in which it has a 48 per cent stake. Europe, the US, Japan and Australia are part of the road map for the future and it will be interesting to see if Latin America and Brazil, in particular, will be added to the list.

“While India is our largest market, it’s only one of our many global markets given that 40 per cent of our bikes and 60 per cent of our three-wheelers are now exported. So, we measure our performance on the basis of a global scorecard and not just India,” Bajaj says. During 2013-14, the company’s two and three-wheeler sales fell by nine per cent to 3.87 million units (4.23 million), while exports were up at 1.58 million units.

Holistic strategy

From Bajaj’s point of view, the global strategy will only work with the mindset of a specialist. This is perhaps why he constantly insists that there is no way his company will revisit the scooter space even if this product segment is growing the fastest in India.

By the end of the day, motorcycles not only form a larger chunk of the global two-wheeler pie but are a far more profitable business, too. And, finally, the spare parts business is yet another ‘immensely profitable’ stream. 

Outlook for FY15

Automobile volumes might not grow in double digits in FY15 even if a stable government comes to power after May 16. The sector typically grows at 1.5 times of the gross domestic product (GDP), which means vehicle sales will remain muted till economic growth picks up from the sub-five per cent levels. Two-wheeler sales are also expected to slow from June onwards, as the wedding season ends.

Two-wheeler makers reported double-digit volume growth for April, both on year-on-year (y-o-y) and month-on-month (m-o-m) basis. Hero MotoCorp’s volumes grew 14.4 per cent y-o-y and nine per cent m-o-m to 571,054 units. While Bajaj Auto reported a 3.7 per cent y-o-y decline in volumes to 331,529 units, on m-o-m basis, volumes were up nine per cent. TVS Motor’s volumes rose 15 per cent y-o-y but declined three per cent m-o-m at 190,683 units. Surjit Arora of Prabhudas Lilladher says two-wheeler volumes have spiked thanks to an extended marriage season and volumes might fall after the season ends. Arora expects a seven to eight per cent growth in FY15.

The passenger vehicle segment continues to be on a sticky wicket. The cut in excise duty and increased enquiries are not converting into sales. According to Karvy Stock Broking, in the four-wheeler segment, Mahindra & Mahindra’s auto volume declined for an eighth consecutive month, with a fall of 12.4 per cent y-o-y and 29.8 per cent m-o-m to 36,274 units. Tractor volumes fell 10.6 per cent y-o-y but grew 17.3 per cent m-o-m to 20,731 units in April 2014. Maruti Suzuki’s volumes dropped 11.4 per cent y-o-y and 24 per cent m-o-m to 86,232 units. Sales of commercial vehicles also continued fall sharply in April, both on m-o-m and y-o-y basis. Ashok Leyland’s volume fell 21 per cent y-o-y and 43 per cent m-o-m to 5,897 units in April, while Tata Motors saw a decline of 34 per cent y-o-y and 34 per cent m-o-m to 33,892 units.

The outlook would remain tepid for commercial vehicles in FY15. Any uptick in commercial vehicle sales can only happen in FY16. Analysts expect passenger car vehicles in FY15 to pick up in the second half, if excise duty cuts are extended beyond June. Also, companies looking at launching new models might see better volume growth than others. Prabhudas Lilladher’s Arora expects passenger vehicles to grow six-seven per cent in FY15, but most of the growth will be back-ended. Frost & Sullivan expects domestic automobile sales to grow 9.5 per cent in FY15, even though domestic sales of the passenger vehicle segment declined by six per cent, CV segment by 25.3 per cent, three-wheelers by 10.9 per cent in FY14

Honda launches Activa 125

 Honda, the biggest Japanese two-wheeler brand in India, is keen on expanding its portfolio of entry motorcycles with a planned addition in the coming weeks even as former partner turned rival Hero MotoCorp moves to fortify its market.

Honda Motorcycle and Scooter India (HMSI), the country's third biggest two-wheeler producer, will add a new bike under the Dream series brand shortly which will be its third such product in that segment, sources said.

Sales under the Dream series (comprising Yuga and Neo) more than doubled last financial year helping HMSI to grow 36% to 3.6 million units. Honda's Dream series grew 116% to 5.65 lakh units compared to 2.61 lakh units sold in 2012-13.

The entry bike segment (upto 110cc) is a 6.8 million units a year market commanding a share of 65%. Though the segment grew just four% last year no manufacturer is ignoring it considering its size.

When asked if Honda would expand its product portfolio in the economy segment Y S Guleria, vice president (sale and marketing), HMSI said, "Keep your expectations high, we will explore more".

Entry bikes have a huge following in the rural markets where fuel efficiency influences purchasing decisions. These bikes are capable of delivering mileage of more than 60 kilometers per litre (kmpl) on an average going upto 85 kmpl.

Delhi-based Honda is thus increasing its focus on the entry level segment so much so that it has put the potential launch of a big engine premium concept bike on the back burner. The CX-01, a off and on road performance bike, which was unveiled at the Auto Expo was scheduled to go for 'fine tuning' before readying it for launch in 2015 or 2016.

The CX-01 is the first bike developed entirely by HMSI's own engineering division also based in India. However, HMSI has instead opted to put more focus on the Dream series for coming period and expand its reach in the rural areas which will host two-thirds of Honda's 1,000 new sales outlets planned this year.

Sensing trouble market leader Hero MotoCorp launched last month yet another variant of its top selling bike Splendor. Called the Splendor iSmart the bike gives more mileage with an 'intelligent' engine which switches off automatically during idling.

Hero presently commands a market share of 66% in the entry level segment with ten models under its fold. Bajaj Auto is the second biggest player with a share of 17% followed by HMSI with a share of 9% and TVS Motors with a share of 5%.

In March Honda's scooter Activa became India's biggest selling model in dethroning the Hero Splendor in the upto 110cc engine category.

One of the other reasons for the shift could be the tepid response HMSI has received for the CBR250, a 250cc performance bike. Last year it sold an average of 640 bikes a month compared to its earlier sales of more than 1,200 units a month

TVS motor ups ante with Star City+

TVS Motor Company, on Monday, launched its all-new motorcycle StaR City+ at an aggressive price of Rs.44,000 (ex-showroom, New Delhi) with a promise of very high mileage. The new launch is aimed at beefing up its presence in the mileage-conscious commuter segment.

StaR City+, which will sport a new 110cc Eco Thrust engine and incorporate many first-time features, promises a fuel economy of 86 kmpl (kilo metre per litre), among the highest for commuter segment bikes.

The new bike intends to attract people in the age group of 25-35 years in urban and semi-urban locations, where motorcycles with on-road mileage of over 60 kmpl are preferred.

“We have been largely absent in the commuter segment except in the low-end of the category. We need to be a big player. StaR City+ is the first of the two launches we have planned. In the next four months, our all-new Victor will be launched, and that will complete our offerings in the commuter segment,” Venu Srinivasan, Chairman & Managing Director, TVS Motor Company, said at the launch.

With StaR City+, the company intends to increase the sales from 25,000-30,000 units to about 50,000 units a month in six month’s time. Total industry volume in commuter segment is estimated at about 595,000 units a month.

Mr. Srinivasan also said the company would have regular and consistent launch of new models. There would be at least one new launch every quarter going forward. Its upcoming new launches for the current fiscal will be Zest (110cc scooter), Victor (110cc bike) and Apache.

Updating on its tie-up with BMW for sub-500cc bikes, he said the first bike from the joint venture would be ready by the second-half of 2015-16. “It's a brand new platform, designed from the scratch. BMW has been working on to ensure highest quality in the bikes,” he added.

About Rs.150 crore is expected to be invested in the venture, which was announced jointly by the two companies in April 2013 to design and sell bikes in 200-500cc category. 

Yamaha Motor India celebrates Women’s Day

Yamaha Motor India Sales Pvt. Ltd. celebrated International Women’s day in association with ‘Aarohan’, an NGO working for women empowerment, felicitating the women from the lesser privileged sections of the society. Also, on this occasion the company invited Femina Miss Delhi, Ms.Koyal Rana and talked about its association with the coveted FBB Femina Miss India 2014in an endeavour to empower and encourage women power and talent.

Yamaha Motor India Sales Pvt. Ltd tied up with Aarohan, who had invited eminent women to deliver lectures on legal awareness, medical care, education etc. in order to enlighten the women audience present at the event. On this occasion,Femina Miss Delhi, Ms. Koyal Rana shared her experience in order to boost the morale of the women participants at the event. Yamaha also awarded the NGO with a gift cheque of worth Rs.1,00,000.

Trailing Behind

We are downgrading Hero (target price R1,730), Bajaj (TP R1,670) and TVS (TP R70) to Sell. Our ratings reflect the concern that Honda’s sustained market share gains will impact the margins of the Indian two-wheeler companies. Honda has gained 890 bps (basis points) market share over the last 24 months, aided by an aggressive launch pipeline and stronger demand for scooters. Hero, Bajaj and TVS have been unsuccessfully trying to staunch their market share losses through more frequent product launches as well as higher brand spends. We believe such competitive activity will continue, resulting in lower margins due to loss of pricing power and higher selling costs.

Hero: Our negative stance on Hero stems from our concerns about market share losses, a deterioration in pricing power and higher marketing costs. We also highlight the market risk for Hero, as it will now be developing products on its own. We also believe that the cost reduction efforts of the management will not yield significant gains and these will be competed away in the market. Investors are positive on Hero on FY15e as the fixed royalty payable to Honda would end by then, leading to a one-time gain. However, we believe that profit growth from FY16e would taper to lower levels.

Bajaj: We downgrade Bajaj to Sell as we believe that current valuations (15.5xFY15e EPS) do not factor in the sustained market share losses in the domestic market as well as the uncertainties emanating in its exports. Bajaj’s margins have remained higher than peers’, due to richer product mix and currency benefits on its exports. However, we expect Honda’s aggression to hurt Bajaj’s margins going forward. While exports (40% of revenues) have provided a cushion, we highlight that near-term growth may remain below trend level. We understand that demand in Bajaj’s major export destinations (Africa, South Asia, Latin America) continue to be affected by changes in regulations and an increase in import barriers.

TVS: TVS is also likely to be affected by the increase in competitive intensity which would constrain its margin expansion efforts. The pressure could be offset to an extent by its recent product launches and a revival in its higher margin three-wheeler business. However, TVS’s current valuations at 15.7xFY15e EPS (adjusting for Indonesian business) are at a premium to Hero and Bajaj. We believe this is unsustainable as the profitability gap with peers continues to be significantly high.

Our revised forecasts and Tps are below consensus: Our target prices for Hero and Bajaj are 20% below consensus and imply valuations at 13.5x FY15e EPS (lower than the long-term average). TVS’s current valuation is at a premium to Hero and Bajaj, which is untenable. On Hero, consensus is building in margin expansion to factor in the company’s cost reduction efforts. However, we do not see material headroom in Hero’s current cost structure and believe that a large portion of the savings will be competed away. Bajaj’s margins have been cushioned by the currency benefit on exports which should taper in the next few quarters. In the medium term, margins for Hero and Bajaj will reflect the impact of competition and this will act as a key catalyst for underperformance.

High competition during FY04-07 significantly impacted margins: 2W (two-wheeler) margins contracted by 250-500bps during FY04-07 as Hero and Bajaj were competing aggressively to gain leadership in motorcycles. Currently, we have seven players who continue to compete for market share. Moreover, Honda is competing with all companies in their respective niches.

We forecast 2W industry volumes to grow at a CAGR (FY14-16e) of 11%: We expect the growth to be driven by scooters (19% per annum) even as motorcycles continue to lag (8% p.a.). Honda’s dominance of the scooter segment and its gains in motorcycles should result in market share increasing from 23.7% in FY14e to 26.8% in FY16e. Hero and Bajaj would lose share by 100-170 bps.

Honda driving market share through models and distribution: Over the last two years, Honda has introduced motorcycle models in segments in which it wasn’t present. It has nearly doubled its distribution from 1,500 outlets in FY12 to a projected 2,500 by end-FY14. This has been supported by an increase in capacity from 2.2m (FY12) to 4.6m currently, and this will further expand to 5.8m by FY16. As a result, Honda’s volume growth of 32% p.a. over FY12-14e has significantly surpassed industry growth of 5% p.a. Hero/Bajaj/TVS have grown at 0%/-10%/-4% during the same period. 

Car, bikes off the mark, trucks won't budge.

Car sales in February rose for the first time in four months on the back of successful recent launches and excise duty cuts, but the overall auto sector remained a mixed bag with utility vehicle and commercial vehicle (CV) sales in the red.

Vikram Kirloskar, president of the Society of Indian Automobile Manufacturers (Siam) and vice-chairman of Toyota Kirloskar Motors, said that improving car and two-wheeler sales should act as a catalyst for growth in other sectors as well. “We have seen some improvements in inquiry levels after excise duty cuts in the interim Budget last month and so we expect strong sales in March and April on the passenger vehicle (PV) side. We hope it is an indicator of better times ahead.”

He added, “But CVs are on a tough wicket and will not improve unless we see increased goods movement. Many projects are being cleared right now and there have been small improvements in GDP, so it should take about 5-6 months for CV volumes to pick up”.

In February, passenger car sales posted a modest rise of 1.39% (to1.6 lakh units) while utility vehicle sales fell 9% (to 43,507 units), dragging the overall passenger vehicle segment (including cars, utility vehicles and vans) growth down by 3.9% (to 2.17 lakh units). Maruti Suzuki, which has an over 40% share of the PV segment, posted an almost 2% rise in volumes on the back of strong demand for its Celerio small car. Rival Hyundai saw flat sales while M&M and Tata Motors recorded 20% and 33% lower volumes, respectively.

“Car sales are up in the month, but we can't say it is the beginning of a trend just yet. Excise duties are expected to go back to previous levels from July unless the new government continues the incentive, but we hope sales will continue to maintain pace nevertheless,” Vishnu Mathur, director-general of Siam, said.

Two-wheeler volumes in the month were up almost 10%, boosted by a 28% jump in scooter sales at (3.11 lakh units) though bike sales only rose 5.4% (at 8.43 lakh units). Hero MotoCorp recorded just over 1% growth while rival Honda saw a 46% jump in volumes. Bajaj posted a decline of 12.5% in sales while TVS saw 3.35% growth.

CV sales in the month fell a sharp 30%, dragged down by 24% lower sales of medium and heavy CVs (to 16,372 units) and 32.5% fall in light CV demand (to 31,610 units). Market leader Tata Motors saw a 42% drop in CV sales while M&M recorded 4% growth. Ashok Leyland saw volumes drop 28%.

“It seems that government incentives have had some effect on passenger car sales, albeit a rather small effect so far. Commercial vehicle numbers, on the other hand, indicate that the urgent need to fix the basics of India's economic model has not abated. This will be the key task for the incoming government, and decisive action on the part of the new government will lead to an improved situation over the next 12-18 months,” said Dr Wilfried Aulbur, managing partner at Roland Berger Strategy Consultants.

Hero launches new bike Splendor iSmart at Rs 47,250

The i3S technology automatically shuts the engine when idling and turns it on when needed by pressing the clutch, giving more mileage in congested cities
The country's largest two-wheeler maker Hero MotoCorp today launched its all-new Splendor iSmart bike, equipped with stop-and-start i3S technology, priced at Rs 47,250 (ex-showroom Delhi).

The Splendor iSmart, which was showcased at the recently held Auto Expo, aims at further consolidating Hero MotoCorp's leadership position in the 100cc segment, the company said in a statement.

The i3S technology automatically shuts the engine when idling and turns it on when needed by pressing the clutch, giving more mileage in congested cities.

The Splendor iSmart is powered by a 100-cc air-cooled, 4 stroke single cylinder engine.

Hero MotoCorp Senior Vice President (Marketing & Sales) Anil Dua said: "We have applied for a patent for this technology which may be later extended to several other models."

At the recent Auto Expo, Hero MotoCorp had showcased new platforms, including the 150cc diesel two-wheeler RNT, electric motorcycle SimplEcity, 'iON' and the 620cc Hastur.

It also unveiled the new 250cc sports bike HX 250R and hybrid scooter Leap along with new scooters such as the 150cc Zir in two variants, 125cc Dare and the 110cc scooter Dash.

"We have been receiving encouraging customer queries on launch schedules of the various models. We plan to roll out four other models - the newer versions of Pleasure, Xtreme, Karizma and ZMR - later this month," Dua added.

Hero MotoCorp also said it has forayed into Turkey in partnership with Asya Makina (Asya Dis ticaretvemakina san ltd sti), a part of the diversified Soysal Group. The company has started its operations in the country with as many as 50 outlets.

LML to launch 5 new scooters over next year

Back in the 1980s, LML Vespa was the face of the upwardly mobile in the country and boasted of long waiting periods that would run into months. A decade-and-a-half later and now without the backing of Vespa, LML is trying to make a comeback.

Within the next 12 months, the company will launch five scooters targeting men and it is banking on the classic design of the LML Vespa. Having exported the scooters to Europe in good numbers since 2007, the firm, which brought down its workforce from 7,500 to just 750 to stay afloat, is now confident of making a comeback in the Indian market.

"We want to bring the real scooter for men back into the market. Companies have launched scooters centred around men in the recent past but they are basically women's scooters with cosmetic changes," said PS Choudhary, head of sales and marketing, LML Ltd.

At present, Honda is the market leader followed by Hero MotoCorp, Yamaha and Suzuki. With its torrid past when a labour strike and poor financial management saw the firm slide into the red 10 years ago, LML does not want to compete with them and has set realistic targets.

"Our research suggests a significant portion of scooter buyers are male and 70% of them use it individually. They buy the scooters for the convenience and do not have too many options," Choudhary added. "It's a big gap, we think with our lineage can fill. Our scooter is not in competition with the ‘male' scooters from Yamaha, Suzuki or Hero."

The comeback may be a little too late and nobody can bet LML will ever retain its position as the second-largest scooter maker but a successful turnaround would be nothing short of a fairytale.

Bajaj Auto launches new Discover 125

Bajaj Auto today announced the national launch of its new Discover 125 motorbike in the market.

K Srinivas, President-Motorcycle Business, said the new Discover delivers best in class power, pickup and drivability.

He said many consumers are tired of the regular commuter bikes which offer only around 8 Ps Power and they would ideally wish to upgrade to sportier, attractive bikes with superior technology and features.

"However barriers such as price and mileage deter them to move on to the 125 cc segment. The all new Discover 125 offers equivalent mileage of a 100cc and comes with exciting performance and features, all at an attractive price. We want the Indian commuter to live life to the fullest and 'Jiyo Dana-Dan'," Srinivas told reporters during the launch.

The new Discover 125 is strong and sporty with a chiseled-muscular tank and equipped with petal disc brake and stylish alloy wheels. It also offers unparalleled comfort through Nitrox suspension, Srinivas explained.

The Discover 125 (Drum Version) will be priced at Rs. 49,075 (ex-showroom Hyderabad). It will be available in six colours -  Electron Blue, Wine Red, Charcoal Magenta, Charcoal Green, Silver Blue, and Silver Gold.

M&M could benefit most from excise duty cut

Interim Budget 2014: Excise duty cuts across auto segment roll in, but investors still wary

Facing its worst ever crisis in over a decade, the automobile industry on Monday was pleasantly surprised by the FM's move to jumpstart demand by slashing excise duties across vehicle segments, but investors did not appear to be buying into the story.

Analysts explain a subtle difference between the excise duty cuts in 2009 and 2014. While the excise duty cut in 2009 stimulated demand in 2009, it is not necessarily going to work this time around.

Cars sales surged 25 per cent, while commercial vehicles gained 39 per cent and two-wheeler sales increased 26 per cent in FY2010 on the back of excise duty sops announced by the government. Recovery was visible in a short span of 6-8 months, and demand perked up in the commercial vehicles segment, too.

The mood is different today. Indian automobile industry is in a protracted slowdown and unlikely to see a V-shaped recovery as seen in 2009. Tax push alone is not enough to propel volume growth for the auto sector in this environment. Second, excise duty is only applicable till June 2014, too short a time to set pace for long-term volume growth.

Another legitimate worry among investors is of the probability of pre-buying led volume growth in the short term. This may lull the new government not to extend the benefit. Such artificially constructed demand would give a false impression of a recovery.

The companies would not able to hike prices so smoothly after four months and if demand revival remains fragile, then it would significantly hit margins and volume growth. Third, the Street is having a perception that the government is now playing an indirect strategy to stimulate growth.

The emphasis is to promote consumerism by lowering prices of vehicle and drive the volume growth. However, government will garner more tax revenue, corporate tax and dividend distribution, which offset revenue forgone from excise duty.

The Street perception is lower prices for vehicle will only solve partial problems temporarily. There are other factors such as interest rate, depreciation allowance, ability to payback and macro environment to decide purchasing decision, particularly for commercial vehicles.

The excise duty will only be able to drive volume for the passenger car segment where a price cut of 3-5 per cent can allure a potential customer to buy car. The principal beneficiary of excise duty in this case will be Maruti and M&M.

Analysts expect about 3 per cent and 5 per cent volume growth in FY15 for Maruti and M&M, respectively, in the passenger vehicle segment and tax sops to add 3-4 per cent for additional volume growth for both these automakers.

Maruti is currently offering an average cash discount of Rs 18,000 for some models, which may evaporate with volume growth kicking in and is likely to perk up average realisation.

India's first 150cc automatic scooter

LML Star Euro 150cc Automatic Scooter launched at INR 54,014

LML announced the launch of its 150 cc Star Euro Automatic scooter yesterday. Priced from INR 54,014 (ex-Showroom, Gujarat), the LML Star Euro 150 is India’s first 150 cc automatic scooter with a full metal body claims LML.

The scooter measures 1,760 mm in length, 695 mm in width, 820 mm in height and 1,260 mm in wheelbase. It has a ground clearance of 160 mm and weighs 112 kg. The Star 150 gets a 7-liter fuel tank and LML claims a fuel efficiency of 55 km/l.

The engine is a single-cylinder, four-stroke, forced air-cooled unit with two valves and produces 9.38 hp (± 0.33 hp) at 8,000 rpm (± 200 rpm). A CVT gearbox transfers the power. The top-speed of the Star 150 is rated at 90 km/h.

The scooter is based on a semi monocoque structure having pressed steel sheet in front and tubular frame in rear. Hydraulic dampers and helical springs provide the suspension duty on the Star 150. Braking power comes from drum brakes at the front and rear. However, a front disc brake will be provided as an option.

The scooter is available in 7 colors including a multi-shade color. Features in the scooter include a glove compartment, engine kill switch and a speedometer with economy and power modes.

TVS Motor company has announced cut in prices

TVS Motor Company today announced cutting prices by up to Rs 3,500 across its product portfolio following excise duty reduction announced in the interim Budget.

"In keeping with TVS Motor Company's tradition of trust and transparency, the benefit of the excise duty reduction has been passed on to the consumers through price reduction ranging between Rs 850 and Rs 3,500 on the entire range of two and three wheeler models," TVS Motor Company Vice President Sales J Srinivasan said in a statement.
The company has also worked out a mechanism to support all our channel partners so that the benefit of the price reduction is available to the consumers even on existing stock, he added.

The company sells various motorcycle models, including Star City and Apache RTR and scooter models like Jupiter and Wego.

Besides, the company also sells three wheelers. In the interim Budget 2014-15, Finance Minister P Chidambaram had announced reduction of excise duty on small cars, scooters, motorcycles and commercial vehicles to 8 per cent from 12 per cent earlier; 24 per cent from 30 per cent on SUVs; 24 per cent from 27 per cent on large cars; 20 per cent from 24 per cent in mid sized cars.

Other two-wheeler makers, Yamaha, Hero MotoCorp and Honda Motorcycle and Scooter India (HMSI) have also announced price cuts after the excise duty cut.

Honda cuts two-wheeler price by upto Rs 7,600

Honda Motorcycle & Scooter India (HMSI) today cut prices of its products by up to Rs.7,600 after the excise duty reduction announced in the Interim Budget 2014-15.

"Honda welcomes excise duty relief given to auto industry in the interim Budget... Honda has decided to pass the full benefit of 4 per cent excise duty reduction on two-wheelers to its valued customers across India with immediate effect," HMSI said in a statement.

The price benefit starts from minimum of Rs.1,600 on Dream Neo motorcycle, priced between Rs.43,150 and Rs.47,289, and goes up to Rs.7,600 on CBR 250R performance bike tagged between Rs.1.58 lakh and Rs.1.93 lakh (ex-showroom Delhi).

HMSI sells a range of scooters including the Activa and Deo, and motorcycles such as Dream Yuga, CB Stunner, CB Unicorn and CB Twister among others.

Presenting the Budget yesterday, Finance Minister P Chidambaram announced reduction in excise duty on small car, motorcycles, scooter and commercial vehicles to 8 per cent from 12 per cent, and on SUVs to 24 per cent from 30 per cent.

Large cars also saw excise reduction to 24 per cent from 27 per cent earlier, and mid sized cars to 20 per cent from 24 per cent.

Suzuki set to scale up gurgaon plant capacity

Two-wheeler maker Suzuki Motorcycles will scale up their capacity from 5.4 lakh to 6 lakh units at their Gurgaon plant.

Speaking to Express,  Atul Gupta, Executive Vice President, Suzuki Motorcycles India said that that they had an initial investment of Rs 550 crore and the same would suffice for their expansion plans in the existing manufacturing plant. It currently produces close to 5 lakh units per annum and can scale up to 5.4 lakh before the expansion is completed.

On recent excise cuts and its impact on sales, he said, “it’s true that it (duty cuts) will not give the same impetus for sales but this would help set up the platform for increased sales from 2015.” He said that the two-wheeler market has been flat and is expected to be the same this year. However, he clarified that the situation in the two-wheeler market is better than the passenger car segment. The company has been growing at close to 10%.

The two-wheeler category registered a growth of 5.76% during the period from April-January while motorcycle grew at 2.65% in the same period. Exports on the other hand saw the two wheeler category grow at 5.27%.

The company, which has a high urban customer centric focus will now look at rural markets as well. “We still have to make inroads into rural markets and will look to strengthening this area,” he said. The company has 600 touch points as on date and will take this to 1,000 by March 2015, he said.

On their introduction of super bikes into Indian markets, he said that this was more a ‘status symbol’ and ‘brand and technological’ showcase for the company and their bikes were now coming in as CBU (completely built units).

Drift with continental

This Royal Enfield addition to the stable is all it’s cut out to be and more, says Tarun Goswami

OVER the years, biking has come to comprise more than mere commuting. Several motorcycle clubs have mushroomed across India and even lady bikers have set-ups that proclaim their gender’s no mean ability.

Indeed, a merry picture of bike lovers haring off on long-distance adventures. To meet the many challenges of the road, bikes with powerful engines, matching maneuverability and easy handling are a must.

This said, Continental GT is Royal Enfield’s new addition to the stable. This two-wheeler has already created a stir among enthusiasts and senior Enfield officials feel it will sell well.

The first Continental GT was introduced almost five decades ago in England and users would visit joints situated along the highways. The modern version has all the desired mod-coms — disc brakes on both wheels, a low handlebar with low rear footpegs to facilitate long-distance runs, a 535-cc single-cylinder, four-stroke air-cooled engine that make light of whatever terrain. The digital electronic ignition system adds to driving pleasure.

It has often been seen that on hilly tracks Royal Enfield bikes create problems because of the weight. A few days back, a long-distance enthusiast who had visited the Everest base camp to get his name into the Guinness Book of World Record told me that on a trip from Managram in Uttaranchal, a couple of Enfield bikes could not complete the tour as their riders found it difficult to handle their machines on the rocky, hilly roads. The GT negates all these ills because it is light and ideal for hilly terrain.

Set up in 1901, Royal Enfield manufactures bikes that are loved and respected by lovers of rugged moving machinery, irrespective of age. The new Enfield bikes are easy and a real pleasure to manoeuvre. With better fuel efficiency, these are the natural choice for rough roads.

It was in the early 1990s that Enfield introduced its single-cylinder 500-cc bikes and I was among the first lot to buy an Enfield 500 in eastern India. The bike had far superior road grip and driving power. This model was later upgraded to the Thunderbird. Work on produce a 535-cc bike more than a decade ago and after carrying out a series of experiments the Gt is now on the road. Priced at over Rs 2 lakh, it has been meticulously put together and is ideal for Indian roads.

Many foreign bike manufacturers have opened units in India but their bikes developing snags because of Indian roads that restrict speeds of more than 100 kmph. The GT eclipse these negatives, so feel free to do test drive and feel the power and beauty of Enfield expertise.

Yamaha cuts two-wheeler prices

Yamaha Motor has cut prices of its two-wheelers by up to Rs 3,066 across models following excise duty reduction announced in the Interim Budget.

“The company has decided to pass on the differential amount to the dealers on their existing as well as transit stock in order to enable them to immediately extend 100 per cent benefit to the customers,” Yamaha Motor India Sales said in a statement.

The price cut ranges from Rs 1,033 to Rs 3,066 depending on the variants, it added.

Yamaha sells scooters Alpha, Ray Z and Ray and a range of motorcycles in India.

Bajaj to deepen Kawasaki, KTM tie-ups

Motorcycle maker Bajaj Auto is building on its partnerships with Japan's Kawasaki Heavy Industries Ltdand Austria's KTM AG as it looks to increase exports of its bikes to fuel growth.

Bajaj is already India's top exporter of motorcycles and three-wheelers, being well established in some neighbouring and African markets, and has this year weathered weak domestic demand thanks to higher export revenue.

"What we had not addressed up until recently was broadly two markets - one the markets of ASEAN and Brazil, which are very large motorcycle markets, and of course the very developed and mature markets of U.S., Europe, Japan and Australia," its Managing Director Rajiv Bajaj told Reuters.

The company plans to sell its bikes in ASEAN, the regional grouping of Southeast Asian countries, andBrazil through Kawasaki, with which it has an existing marketing agreement and sells bikes in the Philippines and Indonesia - markets where it does not have its own network or where the Bajaj brand is less well known.
"In the next 12 months, we hope that we can address some more markets together, perhaps markets likeThailand or Malaysia in the ASEAN region and, hopefully Brazil as well, as far as Latam as concerned," Bajaj said.

The company will use its partnership with KTM, in which it has a 48 percent stake, to sell more in developed markets, such as the United States, Europe, Japan and Australia.

At its facility in Chakan in western Maharashtra state, Bajaj made one out of three KTM bikes sold worldwide last year, according to Bajaj, who expects that to rise to one out of two by 2017.

"It is in this manner that we try to build our export business model - some markets as Bajaj, by Bajaj. Some markets as Kawasaki Bajaj, through that partnership, and in some markets as KTM."

Budget effect: Auto-makers cut prices

Major automobile companies on Wednesday cut prices two days after Finance Minister P Chidambaram reduced the excise duty on vehicles. The carmakers hope this will give them a much-needed sales boost.

Across the board

Maruti Suzuki has slashed prices by ₹8,502 to ₹30,984, and Hyundai Motor India by ₹10,000 to ₹1.35 lakh across all models, said statements by the companies.

Maruti also cut the price of its recently launched compact car Celerio by ₹13,615. It had announced a price of ₹ 3.90 lakh-4.96 lakh ex-showroom Delhi for the different variants.

These price cuts, effective from Wednesday, will be over and above the discounts the companies were already giving. For example, if Hyundai Eon has a base price of ₹2.97 lakh (ex-showroom) and there was a discount of ₹12,000 on this price, it will now get cheaper by ₹22,000 (with the ₹10,000 additional cut) ex-showroom.

“The Finance Minister has given some hope to the industry by reducing excise duties and we will also pass on the benefits to customers. These price cuts will be above all discounts we are already offering to customers on select models,” confirmed Rakesh Srivastava, Senior Vice-President (Sales and Marketing), Hyundai Motor India.

Volkswagen has reduced the prices of the Polo by ₹18,000-₹31,000, Vento by ₹14,500-27,000 and Jetta by ₹38,000-51,000.

Utility vehicle manufacturer Mahindra & Mahindra has reduced prices by ₹13,000 to 49,000. The company will also reduce the price of its premium SUV, the Rexton, by up to ₹92,000.

Honda Cars India (HCIL) announced ₹14,650-₹44,741 reductions across all models.

“The reduction in duty will give the necessary boost to consumer demand and fuel growth in the auto industry,” said Jnaneswar Sen, Senior Vice-President (Marketing and Sales), HCIL.

Two-wheelers companies such as Hero MotoCorp and Honda Motorcycle & Scooter India have also cut prices by up to ₹4,500 and ₹7,600, respectively.

Luxury cars, too

Luxury car makers Audi India and Mercedes-Benz India had announced reduced prices on Monday itself. The Audi A4 sedan’s (base) price is now ₹29.85 lakh from ₹30.58 lakh earlier.

Mercedes-Benz India has cut the prices of its C-class, E-class and GL-class by ₹55,000 to ₹2 lakh.

The Finance Minister on Monday had announced reduction in excise duty from 12 per cent to 8 per cent on small cars, two-wheelers and commercial vehicles and from 30 per cent to 24 per cent on sport utility vehicles.

The excise duty on large and mid-segment cars was brought down to 24 per cent and 20 per cent, respectively.

(This article was published on February 19, 2014)

Big n' burly bikes buzz loud in motown.

They form a tiny niche in India’s volume-heavy motorcycle market. But when it comes to growth, super bikes are in top gear on Indian roads. Riding on the home-grown Royal Enfield along with some iconic global brands like Harley Davidson, Triumph, Suzuki, Yamaha and Honda, the creamy layer of the motorcycle market, the 10,000 unit strong segment is attracting enough eyeballs and customer interest for the players to kick in with more models, greater localization and network expansion.

    Take Royal Enfield, still the brand with the largest footprint in the 250cc-plus motorcycle market. Despite the slowdown, RE is revving up both volumes and profitability. “We produced and sold 180,000 units in calendar 2013 and we are aiming for 250,000 units in 2014,” said Siddhartha Lal, MD & CEO, Eicher Motor Ltd, the parent company for Royal Enfield. “We’re actually gunning to cross that target so demand is higher.”

    With the Continental GT just out in the market, RE is also firing on all cylinders, delaying its production revamp to squeeze out more volumes from both its old and new plants near Chennai. “The transition from the old plant to the new will be slower so the old plant brings in more capacity this year,” said Lal. “We’re adding phase 2 and 3 as we ramp up for 2014 and 2015. The new site should give us 600,000 units ultimately.”

    Harley Davidson, the first of the goliaths, has just rolled out its first “new platform family” with the aggressively priced Street 750. “It’s the first new platform for us in 14 years and the aggressive pricing (just over . 4 lakh) should bring us a new set of customers,” said Anoop Prakash, MD, Harley Davidson India. “We will have more models and variants off this platform. We now have 4,000 Harley owners in India since 2010 and we expect to clock high double-digit growth this year.”

    The super bike market – excluding RE – currently makes up for around 10,000 units a year. Of that, the top end – in the . 5 lakh plus category – comprise a mere 3,000 units. Compare that to the roughly 800,000 bikes sold every month in India and the disparity becomes obvious. As does the potential. “Back in 2008-9, this segment was just 450 units a year,” said Vimal Sumbly, MD, Triumph Motorcycles India. “This market took off when Harley set up shop in India.” British heritage brand Triumph is camping here with its “full range of 10 models and we’ve already got 160 bookings from our first unveiling in Mumbai, Bangalore and Hyderabad. We should hit 500 units by end-March and 1000 units by the end of calendar 2014,” he said.

    One of the reasons why global super bike brands are kicking up some action in India, despite the small numbers, is the way the luxury end of the automobile market has managed to buck the slowdown that’s now blighted India’s once shining growth story. As Indians scale up from commuter bikes to more performance-oriented models, the trickle-up will benefit these leisure segment products as well. Said Shirish Kulkarni, MD, DSK Motowheels which handles the Hyosung brand in India: “The 250cc segment will soon be what the 150 cc commuter-plusperformance segment used to be just a couple of years ago. The 250-600cc segment should grow upwards of 20%.”

BAJAJ UNVEILS NEW PULSAR AT THE 2014 AUTO EXPO

From motorcycling enthusiasts to car lovers, Bajaj Auto has something for all at the 2014 Indian Auto Expo. We take a closer look at what Bajaj has planned for the upcoming year

If there was one thing that enthusiasts and autojournos were looking forward to, it was without doubt visiting the Bajaj Auto Stall at the 2014 Indian Auto Expo. And boy oh boy! It did it live up to expectations and in fact even more. The leading twowheeler manufacturer of India today took the wraps off the two models that will soon be added to its Pulsar lineup - the sports cruiser Pulsar CS 400 and the sportier Pulsar SS 400. Like the 200 Duke and the Pulsar 200NS, both these models will also share some engine parts with the KTM 390 Duke. Mated to a six-speed transmission, both these Pulsars will be powered by a 375cc liquid-cooled, 4-valve triple spark engine with Fuel injection. While the spy shots of the Pulsar SS 400 have already started making their rounds on the internet, it might just be a while before these models finally hit the production lines.

Aside from both these motorcycles, the U Car concept also managed to turn a lot of heads at the Bajaj Press conference today. The U Car is the passenger version of the RE 60 that Bajaj showcased at the 2012 Auto Expo. The company claims that this quadricycle will even be lighter than the 400kg RE60. U Car too will host a liquid-cooled, 4-valve, triple spark engine with fuel injection. This front-wheel drive car will be mated to an automatic transmission.

Last year's show stopper, the Bajaj RE 60 was also seen at the Pune-based manufacturer's stall aside from the Discover range of motorcycles.

Bajaj Akurdi plant staff get Rs 10,000 hike in wages

Workers of Bajaj Auto's Akurdi plant got a R10,000 hike in their wages after their union, the Vishwakalyan Kamgar Sanghatana (VKS), signed a wage agreement with the company on Monday. This has renewed hope for achieving a wage settlement at the Chakan plant soon, Dilip Pawar, president of the union said.
At present, there is no production on at the Akurdi plant and workers are used for non-production work at the Bajaj Auto R&D centre and the tool room located here.

The Akurdi plant has only 130 workers and the larger chunk of workers are at the Chakan plant. But after this agreement, the union is positive about the prospects of the Chakan unit to reach their wage agreement.
Negotiations are on at the Chakan plant after workers ended their 50-day strike and resumed work in August 2013.

The VKS has threatened to go on an indefinite hunger strike from February 16 after suspension of the some of the workers. The Chakan plant has 1,000 permanent workers who are part of the VKS union.
The Chakan plant also has another 1,000 workers at Chakan who are either on contract or under training and apprentice schemes.

Meanwhile, the company on Tuesday reported that its sales declined by 14.36% to 1,67,869 units from 1,96,023 in the same month last year.

Bajaj Akurdi plant staff get Rs 10,000 hike in wages

Workers of Bajaj Auto's Akurdi plant got a R10,000 hike in their wages after their union, the Vishwakalyan Kamgar Sanghatana (VKS), signed a wage agreement with the company on Monday. This has renewed hope for achieving a wage settlement at the Chakan plant soon, Dilip Pawar, president of the union said.
At present, there is no production on at the Akurdi plant and workers are used for non-production work at the Bajaj Auto R&D centre and the tool room located here.

The Akurdi plant has only 130 workers and the larger chunk of workers are at the Chakan plant. But after this agreement, the union is positive about the prospects of the Chakan unit to reach their wage agreement.
Negotiations are on at the Chakan plant after workers ended their 50-day strike and resumed work in August 2013.

The VKS has threatened to go on an indefinite hunger strike from February 16 after suspension of the some of the workers. The Chakan plant has 1,000 permanent workers who are part of the VKS union.
The Chakan plant also has another 1,000 workers at Chakan who are either on contract or under training and apprentice schemes.

Meanwhile, the company on Tuesday reported that its sales declined by 14.36% to 1,67,869 units from 1,96,023 in the same month last year.

2-wheeler makers shift focus towards scooters

AUTO Expo 2014 revealed increasing competitive intensity in scooters, premium bikes and entry level sedans. While executive segment motorcycles lacked the zing, premium bike riders would be spoilt for choices from not only Hero and Bajaj Auto but also Harley, Triumph and Aprilia. Hero showcased 3 new scooters; Honda, TVS, Suzuki, Yamaha are all launching a scooter each to enhance their portfolio. The entry and executive segment motorcycles lacked the zing this season with no notable launches/showcases. The limelight was taken by scooters where Hero Motocorp surprised us with 3 launches - while the 110cc Dash was expected to be showcased, we did not expect the showcasing of the the 125cc Dare (we feel this could be a volume garnering product) and the 150cc Zir, both of which look quite good. Honda, TVS, Suzuki, Yamaha are all launching a scooter each to enhance their portfolio – Honda’s 125cc Activa and TVS 110cc Scooty could definitely add further volumes for the respective OEMs. Bajaj Auto as expected gave the segment a miss. Premium bike riders too are likely to be spoilt for choices with both Hero and Bajaj Auto further adding to their portfolios with Hero adding 220cc/250cc products and Bajaj Auto going further premium with 400cc products.

Chakan staff reject Bajaj offer of rs 10000 raise

Bajaj Auto offered a Rs 10,000 wage hike to its workers at the Chakan plant on Saturday night, few hours before the workers' union president was to begin his indefinite hunger strike.

The management displayed the notice at night when the workers of the second shift were on duty. The wage hike was to come into immediate effect after a written acknowledgement from the workers.

A notice signed by Kailas Zanzari, vice-president, motorcycle (manufacturing), proposed wage hike in three slabs — a raise of Rs 10,000 for workers with five and above years of working experience, Rs 9,500 for workers with three to five years of experience and Rs 9,000 for workers with up to three years of experience.

On Sunday morning, the union held a meeting and decided to postpone the hunger strike call. But the recognised union, Vishwa Kalyan Kamgar Sanghatana (VKS) and its president, Dilip Pawar, have rejected this new offer.

Pawar, who was to start his fast on Sunday, told workers that he has taken this decision to
postpone the fast to allow for one last chance to resolve the issue with the management.

Pawar said the union was not given a copy of the notice and no worker was going to sign such an agreement and this was not the legal way of doing it. “We will seek legal opinion on this matter and decide our next move,” Pawar said. The union also saw this as an attempt the disrupt the unity of the union. “We want a uniform wage hike,” Pawar said.

Zanzari stated that management’s offer on the wage package was final and there could be no further discussion on this beyond what was offered and displayed on the notice board. This was the final offer as far as CTC was concerned but if they had other issues the company would continue to meet and discuss, Zanzari said.

The company in a statement said the R10,000 hike was the best in the Chakan belt. But the workers said companies such as JCB had given a higher raise to its workmen and they wanted Bajaj

Egypt two-wheeler import ban likely to hit Bajaj Auto hard

Egypt's Cabinet has proposed to impose a 12-month ban on imports of two- and three-wheelers, a move that could spell a big setback for Bajaj Auto's exports.

The ban is not final yet, but if implemented could impact Bajaj the most, as its exports to the African nation formed about 6% of Ebitda in the third quarter of 2013-14, analysts said.

The Egypt Cabinet authorised its ministry of finance to go ahead with the ban on February 12, a move primarily designed to give a leg-up to its fledgling automobile industry. It's the export earnings that helped Bajaj Auto cushion the blow on earnings growth in 2013-14, when domestic volumes declined.

Analysts were quick to weigh in on the move. As the prospect of a probable export ban looms, Morgan Stanley moved its stock rating to "equal-weight" from "overweight" and revised the price target to 1,983 from 2,124 a share. Morgan Stanley's Binay Singh and Yashesh Mukhi, in a note to investors titled 'Export Visibility Decreasing; Move to EW', said: "Our Overweight rating on Bajaj rested on exports outgrowing domestic and weak currency benefit offsetting domestic inflationary pressure. The potential import ban in Egypt puts this at risk. Upside to our price target is just 4%, risk-reward at current level is not attractive".

Egypt constitutes a vital export market for Bajaj Auto, since it contributed 31% of the total three-wheeler exports and 3% of the two-wheeler exports in 2012-13. Analysts think it could lead to a downward revision of FY15 earnings per share (EPS) by as much as 7%. In an e-mail response to ET's queries, Rajiv Bajaj, managing director of Bajaj Auto, said: "Since we are given to believe that a final decision will be taken by the appropriate Egyptian authorities only next week, we cannot offer any comment on this matter today."

The shares of Bajaj Auto lost 3.23% to 1,839 on the BSE on Friday. According to Bloomberg, consensus EPS estimate for FY15 stands at 135.48, a share that implies growth of 14.82% year-on-year.

The earnings growth of 15% for FY15 now would be at risk, given that the Street was factoring in an export volume growth of 15%.

Eicher Motors to pump in Rs 600cr to ramp up bike production capacity

Eicher Motors plans to invest Rs 600 crore in two years to ramp up production capacity of its motorcycle division Royal Enfield and also to develop new global platforms as well launching new bikes starting 2016.

Royal Enfield is looking to complete work at its Oragadam facility in the next two years thereby taking the total capacity across the two plants to over 5 lakh units annually by 2016. It had produced a total of 1.78 lakh bikes in 2013.
"We will be making an investment of Rs 600 crore in Royal Enfield towards capacity expansion and development of new global product platforms over 2014 and 2015," Eicher Motors Ltd MD and CEO Siddhartha Lal told reporters here.

The investment will go into capacity expansion, improving research and development (R&D) infrastructure and adding new products, he added.

"Last year, we had set a production target of 2.5 lakh units for 2014, but now it has been revised to 2.8 lakh units considering the demand for our bikes in the market," Lal said.

By 2015-end the Oragadum plant would be completed fully thereby taking the total capacity to around 5 lakh units per annum, he added.

Lal said the additional capacity would help in reducing the waiting periods for various models.

When asked about the new product platforms, Lal said: "In the next 5-7 years horizon, we will be entirely focused on the mid sized motorcycle segment (250 cc-750 cc). We do not have any intention to enter below or above this segment."

He added that the new platforms are being developed keeping in mind global ambitions of the company.

"We are working on multiple platforms. What will be the final outcome can't be known now," Lal said.

The company, which sells Bullet, Classic, Thunderbird and Continental GT models, is also looking to enhance its dealer network in the next three years.

"We currently have around 300 dealerships across the country. In the next 2-3 years this number would grow to around 500," Lal said.

Commenting on the the recently introduced 'Pro Series' range of trucks in the 5-49 tonnes segment, Lal said the entire product range would be out in the next 18 months.

When asked about progress on the 50:50 joint venture with US-based Polaris Industries, he said:"It is well on track for a commercial launch in 2015."

"We are trying to create a new segment in personal four wheel space. It is an on road personal vehicle, a new segment, which we are trying to create," Lal said when asked about JV's product development plans.

TVS motor showcased Scooty Zest in Autoexpo 2014

TVS Motor Company showcased its iconic model, TVS Scooty, this time in an all new avatar. The new scooter, named TVS Scooty Zest, is an ideal mix of weight, dimension and handling and is propelled by a larger zippy 110cc engine which delivers best-in-class fuel economy while ensuring better pickup and ride comfort.The all new TVS Scooty Zest embodies elegance while flaunting a design language that invokes expressions of fun, freshness and freedom for young girls. Its soft form blends smoothly with crisp and fluid lines and tense highlights.

Commenting on the new model, Mr Aniruddha Haldar, Head of Scooters, TVS Motor Company, said, “With TVS Scooty Zest , we have taken the Scooty brand to the next level. TVS Scooty Zest now gets fresh and contemporary styling which is trendy and reflects the femininity of the brand. The enhanced engine capacity gives it a more peppy ride. We have also introduced several new features which will enhance the value of product. “

An array of new and exciting features along with perfect ergonomics and comfortable seating assures a peppy and stress free ride. Designed to partner the independent woman of today, TVS Scooty Zest will be available in vibrant colours and comes with the promise of being a stylish and agile commuter.

The company is scheduled to launch TVS Scooty Zest in the next few months.

Bike makers rev up focus in sports segment

Anticipating more buyers in the premium sports segment, motorbike makers are now looking to spruce up their portfolios in the coming months, with about 10-12 launches lined up for this year.

Bajaj, Hero and TVS, among others, are bullish about the sports segment (150cc to 400cc) to grow in volumes — from 14.6% now to about 25-30% of the total market in three years.

“In the past seven to eight years, the share of the premium segment has increased from 10% to 17% in the industry. With improved road network and affordability, and with people upgrading to the powerful/leisure category, there exists a clear case of volume growth far superior than that in the mass market segment,” says Aashiesh Agarwaal, head (research), Edelweiss Financial Services.

Bajaj Auto, which dominates the segment with its Pulsar range, and holds 35% market share in the sports category, showcased two new variants — Pulsar CS 400 and the Pulsar SS 400 — at the recent Auto Expo. These bikes will be launched in the current fiscal and are expected to cost over Rs 1.5 lakh. The company also markets Kawasaki Ninja 250R and KTM 200 Duke in India.

“We already enjoy a dominant market share in the segment and want it to grow. For us, Pulsar is the model that represents the sports segment and that’s where our new offerings are,” says K Srinivas, president (motorcycle business), Bajaj Auto.

Rival Hero MotoCorp, too, displayed a 250cc bike, Hero HX 250R, developed with technology partner Erik Buell Racing, at the Auto Expo — a step up from its most powerful 225-cc Karizma ZMR. The bike, seen as being more powerful than its nearest competitor, Honda CBR 250R, is expected to be priced around R1.3 lakh. Suzuki, which is looking to grow its portfolio in India, aims to launch the Gixxer 155cc, 4-stroke engine bike, along with the 250cc Inazuma over the next few months. Mahindra, too, took the covers off its much awaited 300cc Mojo motorcycle.

“The premium segment might be impacted in a slowing economy. However, once the market recovers, the segment will grow much faster,” says a Hero

Bajaj claims sabotage by staff at chakan plant

There is worker unrest at Bajaj Auto's Chakan plant near Pune, according to the company. The management claims "some of the union activists are sabotaging machinery/equipment, causing deliberate production loss" and "creating an atmosphere of terror by agitations in the plant".

The unit makes the Pulsar and KTM range of motorcycles. It had seen a 50-day showdown between management and workers over pay rise and reinstatement of suspended workers last year. Later, the management decided to give a phased increase in pay of Rs 10,000 a month.

"The Vishwa Kalyan Kamgar Sanghatana (VKKS) is making irrational demands in the case of the Chakan plant, where the workmen have much lesser experience than the Akurdi (its other Pune factory) workmen. The raise of Rs 10,000 a month given to the Chakan workmen with five years of work experience is the same as that of Akurdi workmen with experience of 25 years of service and is the best rise in the Chakan industrial belt," the company stated. The average cost-to-company of a Chakan workman was now about Rs 35,000 a month, the company said.

VKKS is the recognised workers' union at the partially closed Akurdi plant, also the company's headquarters. The union has been accused by Bajaj of trying to influence workers at Chakan, where there is no union. VKKS signed a memorandum of understanding with the Bajaj management for a wage revision of Rs 10,000 earlier this month for Akurdi. "...the workmen (at Chakan) are going through appropriate disciplinary proceedings. Management wishes to inform that Bajaj Auto continues to believe in its fair and firm approach towards industrial relations," Bajaj Auto added.

Wheelz 2014 kicks off

Days after the high profile auto expo organized by the Confederation of Indian Industry (CII) concluded in Delhi, the chamber flagged off Wheelz 2014, an auto expo on a smaller scale. This year, nine car manufacturers and five twowheeler companies are participating at the fare, showcasing more than six dozen products that range from scooterettes priced Rs 30,000 to luxury cars with sticker price of over Rs 1 crore.

    While this is the third edition of Wheelz, this year it is being viewed with added significance by the auto industry as it offers a last gasp opportunity to shore up sales before the fiscal draws to a close. With the industry recording a sales drop across segments, auto manufacturers are hoping the excitement generated by launches at the auto expo will translates to footfall at Wheelz and convert a portion of enquiry into sales.

    Among the cars that have made it to the Wheelz from the Auto Expo are the new generation Honda City, Maruti’s latest hatch Celerio featuring the auto gear technology, Tata’s Nano Twist and Vista Tech, Hyundai's new generation Santa Fe. The disappointment is with Force Motors that has showcased the old variant of its premium SUV Force One. The other car makers present are Fiat and Chevrolet.

    At the luxury end of the car market, BMW has showcased the SUVs X1 and X3 as well as the sedans 5 Series and 7 Series. Mercedes-Benz, on the other hand, displayed the B Class tourer and M Class SUV while offering two sedans — C Class and E Class — for test drives.

    Among two wheelers, the spotlight is firmly on Harley Davidson that displayed the Fat Boy, Iron and Super Low. In addition, Honda Motorcycle & Scooter India and Hero Motor Corp, the number one and two in the Indian bike and scooter industry have a high decibel presence with the entire range. TVS and Mahindra Two Wheelers have also displayed their portfolio. Biking gear outfits have also set up two stalls.

    CII principal advisor Subrata Niyogi is confident Wheelz will draw the crowds. “The display of several new models should kindle interest in cars. While scope for taking test drives and registering sales in the Delhi auto expo is limited, the industry is expecting good business at Wheelz,” said Niyogi. In fact, the participation by companies is the highest this year at 22 against 12 in the first edition and 16 in the second.

Siam looks to govt for support as auto sales fall

Showing no signs of revival, passenger vehicle sales in the country during January fell by 9.3 per cent as compared to 2.42 lakh units sold during the same month last year, according to data released by the Society of Indian Automobile Manufacturers (Siam) today.

“There is no respite for the auto industry. We hope, from the government, that in the vote-on-account there will be some support for the auto industry. The situation now is worse than FY09, when the government had provided relief to the industry with policy support,” Siam deputy director general Sugato Sen was quoted by PTI on the sidelines of the Auto Expo.

Sales of domestic cars during the month fell by 7.59 per cent to 1.6 lakh units compared to 1.7 lakh vehicles sold during the same month of 2013.

Maruti Suzuki India in January posted 6.88 per cent decline in its domestic sales at 82,461 units as against 88,557 in the same month last year. Hyundai Motor India Ltd also posted 2.61 per cent dip in sales during the month at 33,351 units. Tata Motors saw its sales decline by 24.38 per cent to 8,463 units from 11,192 in the same month last year. Honda Cars India, however, saw its sales increase nearly three-fold to 15,597 units in the month from 5,421 in January 2013 primarily on the back of Amaze and new City.

Total commercial vehicle sales were down by 20.93 per cent to 49,987 units from 63,218 units, while medium and heavy commercial vehicles were also down by 17.42 per cent at 15,769 units as against 19,095 units in the same month last year.

Motorcycle sales in January grew by 4.04 per cent to 9,22,323 units from 8,86,521 in the same month last year.

On the contrary, market leader Hero MotoCorp and Bajaj Auto registered a decline in sales. While Hero saw its domestic bike sales decline marginally to 4,89,322 units in January from 4,94,109 in the year-ago month, Bajaj Auto’s sales declined by 14.36 per cent to 1,67,869 units from 1,96,023 in the same month last year.