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.

Quadricycle policy rides forward to Road Ministry

The much awaited policy on Quadricycles has crossed the final hurdle, as the Union law ministry has cleared the proposal and forwarded the policy document for final notification to the Ministry of Road Transport & Highways for creating a new category of vehicles. The Law Ministry has cleared the proposal late last week, a source close to the development said.

 The onus is now on the Ministry of Road Transport and Highways to issue a final notification , a move if it comes will see Bajaj Auto's RE60 rolling out on Indian roads in 6-9 months time. Oscar Fernandes, the minister for road transport and highway had cleared the proposal in late 2013, after incorporating suggestions and objections from other OEMs. The proposal had moved to the law ministry.

People close to the development say, the "crossing of Ts and dotting of I's was done by the law ministry last week and if all goes well, the Ministry of Road Transport & Highways (MORTH) might come out with final notification in the next 15 to 30 days. The two key clause of the final notifications are likely to be that Quadricycles will only be allowed for commercial transportation purpose.

Bajaj Auto will be allowed to roll out RE60, six months from the date of final notification. This may give the competition a little more lead time to develop their Quadricycle. M&M has already confirmed to ET that the company has begun work on its own quadricycles and Piaggio too is watching the development closely. Rajiv Bajaj, MD, Bajaj Auto told ET, "We understand that the union law ministry has cleared the Quadricycles proposal. We have lost 2 years and lost 90% (because the vehicle can be used only for commercial use) of the market."

The final notification will lay down broader specifications of size & dimension, weight, power etc, but the MORTH will then give the responsibility to the testing agency ARAI or ICAT for the statutory order. In the statutory order, the testing agencies will come out with finer aspects of vehicle specification like the key parameters needed for safety, emission etc.

Post the framing of the statutory order , the vehicle will go through road tests under new rules. If it confirms to standards set by the testing agency, then the vehicle will be allowed to register under Union of India. Since it is meant for public transport, the quadricycle is likely to get separate permits just like the three wheelers and taxis to ply on roads from Regional Transport Offices of various state governments.

For the first time, a new category of vehicle has been created, since the framing of Central Motor Vehicle Act, respective state governments may have additional say on the category of the vehicle and on the number of vehicles allowed. West Bengal state government has already expressed interest to this new category of vehicles. Bajaj Auto is in the process of reaching out to various other state governments for selling the vehicle. Bajaj is upset with the protraction in clearance of the proposal and says the advantage of the first mover may not be there for long.

There was a division within the industry on creating this new category of vehicle, which Bajaj claimed was more to delay the framing of policy then blocking it. "M&M is definitely developing the vehicle, they have said so.

I have no doubt that Tata are also developing a quadricycle, their objective was to delay things so that they can catch up, it was not that they were opposing it. A week before his death, Karl (Slym) managing director of Tata Motors too had expressed his interest. I met Venu (Srinivasan), chairman and managing director of TVS Motor Company at the Expo, he did not say so, but I am sure TVS is working on it and so is Piaggio. I think they have all been working on it for two years, the lead which we thought we would get, we would not get now," added Bajaj.

Considered as the safer alternative to the three wheelers , Quadricycles will be allowed to ply only in cities as transport vehicles and not as a personal vehicle. The quadricycle, is a step-up from traditional auto rickshaws but significantly cheaper than a car because of its weight, power and speed. According to the specification known so far, the vehicle meant for carrying passengers has to be of 450 kg and for carrying goods should be of 550 kg.

The length will be 3 metre for passenger version and 3.7 metre for goods version. Quadricycles can carry a maximum of four passengers anda goods vehicles can carry 500 kg. Bajaj Auto's RE60 has a kerb weight of 450 kgs, emits 50 gms of carbon dioxide per kilometer and delivers high fuel efficiency of over 35-40 kilometers per litre.

M&M plans an electric storm at Auto Expo

Company to also display its first clutch-less automatic manual transmission engine

 Mahindra & Mahindra (M&M) has a show-stopper up its sleeve for the coming Auto Expo. And, it’s not from its diesel-driven utility vehicle family, which has a created a fortune for the automaker. At the auto event, M&M is set to unveil India’s first sporty four-door all-electric car built by its subsidiary, Mahindra Reva Electric Cars (MREC), which has developed e2o, a four-seater mini electric car.

Also on display at the Auto Expo will be the electric version of Mahindra’s self-developed sedan Verito (inspired by Renault’s Logan), which could be launched in the domestic market provided the government comes out with some incentives for the sector.

A full hybrid version of one of the company’s most popular sports utility vehicles (SUV), XUV500, will also be showcased. This hybrid model is expected to have a small diesel engine and an electric motor. M&M has been building the micro-hybrid versions of various models such as Scorpio and Xylo.

Pravin Shah, chief executive (automotive division), said: “We are trying to build brand Mahindra globally. There will be a  variety of vehicles under the electric platform. Various things we do surrounding one big activity that is in true sense a representative of our true DNA.”

A Mahindra Formula E car, which would participate in this year’s inaugural FIA Formula E series in September, will share the stage with other M&M products at the Expo.

In addition, to cater to off-road enthusiasts, a turbo-charged XUV500 will be on display. This variant, the most powerful model of the premium SUV, had won M&M the Asean rally last year and is in a customised form.

The company will also display its first clutch-less automatic manual transmission (AMT) engine-transmission technology, which is also pursued by car market leader Maruti Suzuki in one of its to-be-launched hatchbacks and also to be showcased at the Auto Expo.

“Position-wise, the AMT will sit in between manual and automatic segments of the market. It will provide the fun and efficiency of manual transmission without the clutch,” added Shah. Chennai-based TVS Motors was the first company to introduce this technology in India when it launched the Jive motorcycle couple of years ago.

M&M’s South Korean subsidiary SsangYong Motor Company will, too, flex its muscles with the showcasing of at least three of its SUVs including a concept. The firm will display the Korando Turismo, a huge multi-seater multi-purpose vehicle, which SsangYong had introduced early last year.

Also on display will be the Limitless Interface Vehicle (LIV-1) concept, a large SUV positioned just above the SsangYong Rexton when it will go into production. LIV-1 follows several recent concept cars from SsangYong, and along with the XIV (eXciting User-Interface Vehicle) series and SIV-1 (Smart Interface Vehicle) shown at Geneva Motor Show last year.

SsangYong is present in India with the Rexton premium SUV. The Korean company which is more than 70 per cent controlled by M&M has been testing the Korando Turismo for an india launch. 

Triumph aims to sell 500 high-end bikes in 2014.

Triumph Motorcycles, makers of premium motorcycles, is hopeful of selling about 500 high-end bikes in a year. The Triumph stable has 28 models and will look to bring more models depending on the market response.

“We are hopeful of selling about 500 units in a year, then 1,000 units the next year and 1,500 units the following year,” said Vimal Sumbly, managing director, Triumph Motorcycles India.

It already has about 100 orders from Bangalore and Hyderabad, where it has set up dealerships. It was anticipating more bookings as it has plans to increase the dealer network to nine after adding Chennai, Kochi, Mumbai, Pune, Ahmedabad, Kolkata and NCR by March end. The waiting period for the bookings would be about three months, he said.

It has launched ten models ranging from 865 cc to upto 2300 cc. These include four CBUs and six CKDs that are assembled at its Manesar plant. The CBUs attract close to 100 per cent import duty while the CKDs attract about 33 per cent. It will bring in more models based on the market response. A 250 cc bike is on the cards for the global market, he said without elaborating on when it would be launched in India.

In the same direction, it has plans to set up a manufacturing facility in Karnataka in 2016. “The proposed plant in Karnataka will be for smaller CC vehicles. Since the super bike segment is about only 3,000 units in India, we will continue to bring the premium bikes via the CBUs and CKDs route,” he said. He said the investment details for the plant would be firmed up later.

Competition is building up in the premium bike segment. On Wednesday, Polaris India launched three models for India priced between Rs 26.5 lakh and Rs 33 lakh.

“Super bikes are a niche segment. The needs of the Indian customers are varied and no single player can meet all of them. It is nice to have competition in the segment as this will increase the choice for the customers,” he said adding that it has a range of products priced a little less than Rs six lakh to more than

Rs 20 lakh and it will back it up a good after sales service.

“Biking is an experience and more people are taking to it. The biking culture is catching up,” he said.