Energy-efficient bikes may zoom on fuel price hike

The government’s move to free energy prices, which may raise fuel rates in the country, is expected to push the demand for small-capacity, fuel-efficient bikes. Reason: The sequential rise in inflation will lead to a change in the buying pattern among bike consumers.

A 100-110cc bike gives an average mileage of 75-80 km a litre under a mix of city and highway riding conditions, compared to just 40-50 km a litre or less by a 150cc and above bike. Although the fuel-efficient range is targeted more towards the interior of the country than urban centres, companies like Honda Motorcycle and Scooter India (HMSI), India’s fourth-biggest seller of two-wheelers, feel that a constant increase in fuel prices will change the buying pattern even in the cities.

Naresh Rattan, vice-president (marketing and sales), HMSI, said: “The overall mindset of the Indian two-wheeler buyer is transfixed towards the fuel-efficiency of the bike. Any increase in fuel prices has a psychological effect on the buyer.”

City-based two-wheeler dealers of Bajaj Auto and Hero Honda said there had been an increase in the number of enquiries for economy bikes soon after reports stated the government may hike fuel rates.

“The demand for our Discover 100 gathered pace over the last few days. People who were earlier keen on going for the Discover 135 are settling for the 100,” said a Pune-based Bajaj dealer.

According to estimates provided by HMSI, the average monthly run by a motorcycle owner is around 1,500 km. The average monthly fuel expenditure is around Rs 750. An increase of up to Rs 3 per litre in petrol price will mean an increase of up to Rs 50-60.

More than 4.5 million two-wheelers in the economy segment were sold last year, which is roughly half of the total of 9.37 million units sold during the last financial year in India.

However, Milind Bade, general manager (marketing and sales), two-wheelers, Bajaj Auto, said: “People are very sensitive towards fuel price hikes and we are expecting their decision to be influenced. However, we also believe that this change in preference will be momentary.”

M&M bets big on electric 2-wheelers

New Delhi: Sensing that the real spurt in growth in the electric vehicle segment in India is going to come from two-wheelers, utility major Mahindra & Mahindra (M&M) plans to focus more on developing and producing electric two-wheelers from its Nashik plant in Maharashtra. The company is looking at cutting down production of three-wheelers.

Following M&M’s takeover of Bangalore-based electric car company Reva Electric, the firm is likely to source technology from Reva to power its two-wheelers, according to industry sources. When contacted, Anoop Mathur, president of M&M's two-wheeler division, declined to comment “on market speculations.”

Industry sources said that M&M is committed to positioning itself as an important electric vehicle manufacturer; and following the takeover of Reva, it has both expertise and the knowhow in developing electric platforms for its various products.

M&M forayed into the two-wheeler segment in July 2008 after the company bought an 80% stake in the loss making two-wheeler company, Kinetic Motor Company. Anand Mahindra, vice-chairman and managing director of the Mahindra Group, had said, “There is strong evidence that two-wheelers are going to enjoy a renaissance.”

Currently, the approximate size of the electric-two wheeler market in China is 14 million, while in India, it is only around 0.1 million. “The electric two-wheeler market in India is bound to grow rapidly...it is in this segment that you are going to see a lot of traction in coming few years,” a Delhi- based auto analyst said.

Abdul Majeed, head of auto practice at PricewaterhouseCoopers, said electric-two wheelers could outgrow the electric four-wheelers. “In my assessment, electric two-wheelers should see a double-digit growth in coming years,” he said.

Honda to lose motorcycle race

Honda Motorcycle and Scooter India (HMSI) may lose market share to competitors like Hero Honda and Bajaj Auto in the domestic two-wheeler market in this financial year, as it struggles to meet surging demand, a top official said.

“Because of the production constraints, we are losing market share and even the Indian market is growing faster than expected,” said Shinji Aoyama, president and chief executive officer of HMSI, the wholly owned subsidiary of Japan’s Honda. The domestic two-wheeler market grew by over 26 per cent while HMSI grew slower at a tad over 19 per cent year-on-year (y-o-y) according to data from the society of Indian automobile manufacturers.

The Indian subsidiary of Honda Motorcycles had a 12.7 per cent market share in the domestic two-wheeler space in 2009-10. Affiliate Hero Honda, which is 26 per cent owned by Honda Motor Company is the market leader in India with over 46 per cent share of the two-wheeler market. Due to sudden surge in demand for scooters and motorcycles post rebound in the economy, HMSI produced 12.78 lakh units up 19.3 per cent y-o-y. This was almost 28,000 more than the production target for 2009-10. Despite this sales are failing to keep pace with the demand from customers for its bikes such as Unicorn and scooters such as Activa.

The company said it has a waiting period ranging from more than one month to three months on its popular models. Prospective customers have a waiting period of two-three months between booking and delivery for the country’s most popular ungeared scooter Honda Activa. For Honda Shine and Honda CB Unicorn motorcycles, the wait period is over one to two months in some parts of India.

“The demand for all these three models is high in the western and southern part of the country, which is leading to a demand supply gap,” said Aoyama. Abdul Majeed, auto practice, leader, PwC India said, “More the waiting period, more the company is likely to lose customers.”

In the present financial year, analysts forecast the two-wheeler market to accelerate its growth to 30 per cent y-o-y. “Even after adding one assembly line at Manesar in Haryana, which will up our capacity to 16 lakh units per year, we would not be able to meet the full growth in demand,” said Aoyama.

Customers in India, who are spoilt by the multitude of choice available in the market, are unlikely to wait months before a Honda product to be delivered, said industry experts. As a result they forecast that Hero Honda and Bajaj Auto the current leaders in the two wheeler market in India would take away market share from HMSI as they have invested in significant capacity to cater to the growing market, said analysts. Majeed also said that HMSI tended to flag its existing model line-up rather than constantly refreshing models which some of its competitors do. Angel Brok­ing, auto analyst, Vaishali Jajoo said, “Bajaj Auto is poised to win back some of its lost market share over the next couple of years, with multiple new launches in the motorcycle segment.”

“HMSI continued with well performing models like Unicorn and Shine for a longer period. Whereas, customers always look for a product to be improved on the key parameters of better fuel efficiency, comfort and style. This is where Hero Honda, Bajaj Auto and TVS score,” added Majeed.

“HMSI focus is also on 125cc and above models. But the majority of volumes come from below 125cc-powered motorcycles. So HMSI should focus on that segment as well in addition to expanding its dealer network across the country, especially in rural areas,” he said. HMSI is now investing Rs 500 crore to set up a second factory at Tapukara in Rajasthan. The new plant is scheduled to become operational in the second half of 2011 with annual production capacity of six lakh units.

May auto sales at 14-year high, smooth ride ahead

Continuing their upward journey, automobile sales in May grew 30% at 12,08,851 units as compared to 9,29,917 units for the same month a year ago, according to data released by the Society of Indian Automobile Manufacturers (Siam) on Wednesday. This is the highest-ever sales jump the industry has recorded for May since 1996.

The numbers junked the largely-held notion that May typically records lower numbers compared to the rest of the year.

The director-general of SIAM Vishnu Mathur said the trend looked positive in the coming months as well and the high sales figures reflect the tenacity of the economy. “The per capita income has almost touched $1,000 and that’s a magical figure, which is the threshold for automobile demand,” he said.

Led by the country’s largest carmaker Maruti Suzuki, passenger car sales surged a whopping 30.5% to 1,48,481 units against 1,13,810 units last year. Maruti sold a total of 76,120 units in May against 62,878 units last year.

Hyundai Motor also saw marginal increase in sales at 27,151 units compared to 23,501 units last year. Tata Motors’ total sales rose to 18,618 units from 12,838 units in May 2009.

The two-wheeler segment spearheaded by motorcycle sales jumped 25.8% in May to 7,25,311 units against 5,76,537 units in the previous year, on the back of burgeoning economy and easier financing opportunities. The world’s largest two-wheeler maker by volumes Hero Honda Motors grew 11.74% to 4,01,320 units in May. Pune-based Bajaj Auto’s sales increased 68% to 1,91,726 units, while Chennai-based TVS Motor Company posted a 21.21% sales growth at 52,319 units in May. Sales of Honda Motorcycle & Scooter India (HMSI) jumped 52.24% to 55,110 units.

Scooter sales in May jumped 45.45% to 1,57,509 units against 1,08,291 units sold last year. HMSI’s scooter sales increased 28.03% at 76,980 units, while TVS Motor’s scooter sales jumped 40.19% in May to 30,567 units. Hero Honda’s scooter sales jumped 23,738 units, an increase by 61.21% from last year.

Despite the robustness in the auto sales, Mathur warned that if the monsoons turn weak, then it could spell gloom in the industry. He also pointed that rising raw material costs are a concern for industry. “If the government takes steps to control the money supply, then at some point of time interest rates will be under pressure. We have to track it very carefully,” he added.

Sales of trucks and buses, a barometer of economic activity, jumped 58% to 48,580 units in May from 30,803 units a year ago. Light commercial vehicle sales increased 37.94% in May to 25,688 units from 18,622 units. Medium and heavy commercial vehicle sales rose 87.93% to 22,892 units compared to 12,181 units in the same month last year.

Exports from the industry also touched a record of 1,79,130 units, the highest-ever in May. In May 2009, total exports stood at 1,19,749. Motorcycle exports grew at 49% at 1,16,832 units, while passenger car exports grew 10% at 32,649 units. “Sales in export markets were very impressive. It is despite the fact that the scrappage incentives offered in some European countries for passenger cars are over,” Mathur added

Vespa set for third coming in India

The iconic Vespa, a name once eponymous with the scooter in India till Bajaj usurped that honour, is poised to make another comeback in a new-age avatar, nearly 50 years after it first rolled into the country. The board of Piaggio & Co has okayed a plan to invest nearly e30 million over two years to establish a 1.5-lakh capacity plant that will produce a model specially developed for India, the world’s second-largest two-wheeler market, the Italian company said in a statement.

“A meeting chaired by Roberto Colaninno (chairman), the board of directors of Piaggio & C. SpA approved the strategic guidelines and industrial plan of a new Piaggio Group initiative in India for the production and sale of two-wheel vehicles, beginning with a Vespa LX 125 model,” the statement said. The first scooters are to roll out by the end of 2012, the company said.

Vespa first entered India in the late 1950s through a joint venture agreement with the Firodias who were then part of the Bajaj group. The Vespa 150 was an immediate success, spawning long waiting periods. The JV was terminated in 1971 in the wake of the Indira Gandhi government’s socialist policies.

The scooter was back in India again through a joint venture with LML in 1983. That partnership ended in 1999 after a protracted dispute with the
companies when LML bought back Piaggio’s stake in the company. Though Piaggio had revealed plans to relaunch Vespa as early as 2006, the scooter’s third coming is tinged with irony as the Bajajs, its first partner, has announced plans to exit the scooter segment to singularly focus on the motorcycle market. Even so, the market conditions are suited for Piaggio to foment strong growth.

“India’s two-wheeler market grew at an average annual rate of 7% between 2004 and 2009, with 8.4 million vehicles sold in 2009. The scooter segment accounted for 15% of the total market, with sales totalling 1.3 million units in 2009 and an estimated average annual growth of more than 13%,” Piaggio said.

Piaggio plans to produce up to 1.5 lakh units a year at its new facility in India. The company, which also makes the Apé range of three and four wheelers, sees revenues from the scooter venture to touch nearly e70 million in three years with sales of 1.1 lakh.

The new factory apart, another one run by Piaggio’s Indian offshoot could also produce Vespas. Piaggio Vehicles India Pvt Ltd, which operates an engine plant for two- and three-wheelers at Baramati in Maharashtra, has the capacity to manufacture Vespas, said managing director Ravi Chopra. “The current capacity for the engine plant is 1,00,000 per annum,” he said.

The Rs 360-crore engine plant has begun to make petrol engines of 125 and 150 cc, with plans to also produce 1 and 1.2 litre diesel engines for Piaggio’s three wheelers.

Piaggio also plans to establish boutique showrooms for selling the scooter. “This is an iconic brand with a long association with India and needs to be showcased accordingly,” said Mr Chopra. Piaggio’s plan to relaunch Vespa comes at a time of “extraordinary growth” of its Indian offshoot.

“From 35,000 vehicles produced and sold in 2003 to more than 182,000 in 2009... has established Piaggio as the leader in three-wheel light commercial vehicles in India,” the company said.

Honda Motor hopes new plant will cut wait time for popular models

Honda Motorcycles and Scooters India (HMSI) has said that with sales remaining strong through the year, it would now depend on its second upcoming plant in Rajasthan to help maintain its growth target of about 22 per cent for 2010-11.

Increased production would also help reduce the month-long waiting period for a few of its popular models, like the Activa scooter.

The fourth largest domestic two-wheeler company laid the foundation stone for its second plant at Tapukara on Monday. While the construction for the plant is to begin immediately, production would only start by the second half of 2011.

“We sold 12.7 lakh units in 2009-10 and this year, we aim to sell 15.5 lakh units. The new plant would help us to meet our growth targets,” said Mr Shinji Aoyama, President and CEO, HMSI.

HMSI's motorcycle sales in 2009-10 stood at 5.2 lakh units, while scooter sales were at at 7.5 lakh units. Mr Aoyama recently said that though scooters represent 60 per cent of sales, the split between scooters and motorcycles would become equal this year. Moreover, as motorcycle demand grows, it may even constitute a larger share of the company's sales by 2012.

Built over 240,000 sq.m taken from Honda Siel Cars's 1,000 acres in the region, the new plant would have an annual capacity of six lakh units in the initial phase. Officials said that there would also be an option of doubling the capacity to 12 lakh if there is high demand. Combined with a smaller increase in annual production at its first plant to 16 lakh units, HMSI would look to have a total annual capacity to produce 22 lakh units when the new plant also becomes operational.

Mr Fumihiko Ike, Managing Director and COO of Honda Asia and Oceania, said that the first plant has almost reached full capacity and the new plant is critical for HMSI's plans for India. “India is one of the most important markets for Honda. There is a promise of future growth,” he said.

HMSI has invested about Rs 500 crore for this new plant, which would involve fresh hiring of close to 3,000 employees.

Ho-hum thrum

Hindustan Times

Yamaha has turned on the heat in India over the past few years. Its premium, performance bikes such as the YZF-R15, Fazer and FZ helped restore the company’s image. These models also served to add some much-needed zing to the Yamaha stable.
So here’s Yamaha’s latest commuter model, the YBR 110. It’s a motorcycle that intends to lure the commuter bike buyer, which constitutes the largest chunk in the Indian market.

Looks
There’s not much on the outside that differentiates this Yamaha from its rivals or predecessors. Dated looking in comparison to such brilliantly styled rivals as Honda’s CB Twister, the YBR is built on an age-old platform. But its large proportions are a bonus in this segment, where rival commuter bikes often look and feel undernourished.

The YBR 110 comes with upmarket alloy wheels and deploys a bikini front fairing. Yamaha has done well to provide it with a powerful headlight, and the instruments are smartly turned out too. A speedometer and fuel gauge are prominently placed along with the regular array of warning lights.

The YBR is equipped with decent switches, including a pass-light flasher and engine killer. Riders will like its well shaped clutch and brake levers, and the soft and comfortable palm grips. The 13-litre fuel tank looks standard, capped with a bowler hat-style filler lid, but leads smoothly into the seat and broad flank panel region.
The tail fairing and brake warning light look bland. The YBR takes a step backwards by using an archaic tubular grab handle. It does win some brownie points for its smartly upturned exhaust and upmarket alloy footrest mounts. It comes with good paint lustre, neat fit and finish and excellent quality. Plastic and rubber components are all of a high standard.

Engine
The YBR 110 is powered by a button-started, 106 cc engine common to its earlier ancestors like the Libero. It’s a conventional, four-stroke, twin-valve and air-cooled power plant that mounts its single-cylinder vertically. The YBR 110 deploys a steel, twin-tube frame, with its engine bolted on just ahead of the tubular swingarm section. Air and fuel are monitored via a standard carburettor.

The YBR’s power output of 7.6 bhp at 7500 rpm is disappointing vis-à-vis the CB Twister, which outputs 9 bhp from an engine of displacing the same cubic capacity. The YBR’s maximum torque output is 0.8 kgm at 6000 rpm.

Ride
The YBR 110 delivers performance and power that was once acceptable on any Indian commuter bike. But now the Honda CB Twister makes it feel underpowered and outdated. Our fastest 0-60 kph time on the YBR 110 was 8.61 seconds, which compares poorly with the 7.13 seconds the Twister takes.
The YBR 110 does, however, come with a delightfully light clutch which is great for urban Indian conditions. The engine also stays silky smooth and vibe-free at almost all rpm. Power delivery is smooth, with each gear ratio thought out. The Yamaha also gets a smooth-shifting, four-speed gearbox that operates via a heel-and-toe shift lever. Top speed is a true 94 kph.

Suspension is conventional, with telescopic front forks and twin hydraulic shock absorbers at the rear. Both front and rear wheels are 18 inches in diameter.
The YBR comes with a plush seat that offers enough width and length, and provides the rider a well thought out, upright riding stance.

However, on the handling front, the YBR 110 does not match its rivals. While straightline stability is acceptable, cornering manners are iffy, and nowhere in the league of its arch rival, the Honda CB Twister. Ride quality though is good, with the suspension allowing a plush ride even when riding over poor road surfaces.
The YBR 110 comes with 130 mm drum brakes at both ends. Brake feel is adequate but not as good as any disc brake-equipped rival. We managed to stop the YBR from 60 kph in 21.1 metres.

The YBR 110 scores really well on the fuel economy front. This Yamaha is just as miserly with petrol as every commuter motorcycle has to be in order to succeed in a mileage-obsessed country like India. The bike delivered 56.3 kpl to a litre of fuel in real-world conditions. It improved on this figure a bit to provide 57.7 kpl when negotiating our highway test route.

Verdict
We come away from the Yamaha YBR 110 a tad disappointed. Yes, part of that has to do with tall expectations after Yamaha’s brilliant models in recent times but it’s more to do with the YBR failing to offer any real USP. The YBR comes with top-class quality, sound engineering and a really refined engine.

But that still doesn’t make up for its bland styling, average handling and dated feel. There’s nothing to make us take notice of it as a motorcycle that’s just been launched. The bottomline is that having experienced brilliant Yamaha bikes like the YZF-R15, Fazer and FZ, we know this Japanese manufacturer is capable of rolling out far better commuter motorcycles in India.