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Bike Makers Gear up to Ride Cross-Country Japanese challengers Honda & Suzuki to vie with Indian champions Hero & Bajaj in entry level
RAJIV SINGH NEW DELHI

As Honda and Suzuki shed their premium tags,strap on helmets and drive into the hinterland,the country is gearing up for cutthroat competition between the Japanese challengers and Indian champions Hero and Bajaj in the entry-level bike segment.The entry level,or commuter segment,which includes motorcycles powered by 75-125 cc engines,accounts for 70% of the worlds second-largest motorcycle market.Its a consuming segment,so everybody wants to have a share of the ever-growing pie, says VG Ramakrishnan,senior director,automotive practice,at Frost & Sullivan.Low ownership of two wheelers,rising incomes in rural and semi-urban areas and increasing number of youngsters in the country are among factors that will help this segment grow and accelerate.This breadand-butter segment will continue to gallop and give volumes to the bike makers, Ramakrishnan says.Bike makers are most aggressive in the 100-125 cc segment (bikes priced between.38,000 and.50,000).Within a span of less than a month,this segment dominated by the likes of Heros Passion and Splendor,Bajajs Discover and TVS Star Sports has seen a flurry of launches such as Suzuki Hayate,Bajaj Discover 125 ST and Honda Dream Yuga.And theres more to come as bike makers gear up to flood this sector with aggressively priced new products and variants.Reason The commuter segment has been the fastest-growing segment in Indias 10-million-units motorcycles market,steadily growing its share from 48% in 2005-06 to 65% in 2010-11 to 70% now.Analysts say its set to explode at an even faster pace. UNDER-PENETRATED MARKET

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While India trails only China in terms of the number of twowheelers sold in a year,penetration level in the country is still much lower than other emerging markets such as Brazil,Indonesia,Thailand and Taiwan.Almost 80% of households do not own a two-wheeler,and 40% of the population has no mode of transport,a recent report by PINC Research says.Also,the demand for twowheelers in now mainly driven by rural India.While twowheeler household penetration in rural India more than doubled (between 2001 and 2011) to 14.3%,the growth in urban India was more sedate growing from 24.7% to 35.2%, says the report published in March.While an increase in crop prices over the last few years has left larger disposable incomes with rural people,non-agrarian sources of income is also on the rise,says another report by credit rating and market research agency ICRA.Around 60% of the rural economy depends on non-agricultural sources of income such as remittances from cities,trading,and employment in the manufacturing sector,says the report.With rural incomes rising and roads connecting more villages in the country,rural India will continue to drive the two-wheeler market.Thats why foreign two-wheeler makers are now headed for rural India. FROM CLASS TO MASS India is a classical mass market.In order to make it big in the country,foreign brands will have to shed their premium tag and plunge into mass market,say analysts.The strategy to straddle all segmentsfrom class to masshas paid rich dividends to multinationals such as Samsung (consumer durables as well as mobiles) and Nokia.Prathap Suthan,chief creative officer of Bang in the Middle,an independent advertising agency,says foreign brands will have to sacrifice western idiom for Indian signatures to make it big in the country.In a market where aesthetic quotient of the buyer is still rudimentary at best,the brands will have to lower their appeal and adapt to Indian sensibilities, he says.This is what Honda has done with Dream Yuga,its newly launched first 110cc bike for mass marketa potent combination of English Dream with Hindi Yuga.With 450-odd million making up the market and with monies to spend,it would be unwise not switching to Hinglish, says Suthan.The Japanese auto majors choice of Bollywood star Akshay Kumar as its first brand ambassador in India is also done with an aim of capitalising on Akshays mass appeal,especially in smaller cities and towns.We have roped in Akshay Kumar as brand ambassador for mass acceptance and emotional connect in the market, a Honda India spokesperson says.Another Japanese major,Suzuki,donned a desi avatar last month by roping in Dabangg Salman Khan for its first motorcycle in the mass segmentHayate,a 112 cc bike.Meanwhile,Japanese bike majors romance with rural India may give sleepless nights to Indian auto biggies,especially Hero MotoCorp,which has 55% share of the market. HERO VERSUS HONDA Hero will be hit most by Hondas mass play, says Frost and Sullivans Ramakrishnan.With the entry of Dream Yuga,he says its a direct fight between Hero and Honda as Bajaj is not a real competitor in the entry-level segment.Honda,the world's largest motorcycle manufacturer,has been steadily raising production and sales across the two-wheeler segment since it ended a 26-year joint venture with Hero Moto-Corp in March last year.This April,Honda Motorcycle and

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Scooter Indias sales grew nearly 50% year-over-year,and it overtook TVS Motor to become the third largest two-wheeler maker in India.While Honda is racing to catch up with Hero,Indias largest bike maker is betting big on its flagship brands Splendor and Passion as well as two new models to ward off any threat in the commuter segment.The company has more than 70% share in the segment up to 125 cc,Hero MotoCorp Senior VP (Marketing & Sales) Anil Dua says.Splendor and Passion each clocked million-plus unit sales in 2011-12.With the planned launch of two new bikesthe 125cc Ignitor and the 110cc Passion Xprolater in the year,we are confident of further strengthening our leadership position, Dua says.Bajaj Auto,the second-largest player,too is strengthening its portfolio in the commuter segment.We continue to be the second largest two-wheeler manufacturer in India in April,and have a significant lead over the third-largest manufacturer, says K Srinivas,president -motorcycle business,Bajaj Auto.In March,Honda had pipped Bajaj by a few hundred units to become the secondlargest twowheeler maker for the month,thanks to its leadership position in the fast-growing scooter market.More than 60% of its sales come from scooters.We will continue with our focused approach as a motorcycle specialist, Bajajs Srinivas says.

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