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Indian motorbike market riding on fifth gear

13-September-2004
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Indian motorbike market riding on fifth gear

Motorcycles sales in India grew by 24 percent in the last financial year ending March 2004. India also happens to be among three largest motorcycle manufacturers in the world along with Japan and China. The market in the last few months has seen almost half a dozen new models being introduced, the latest being the Unicorn from the Honda stable. Every motorcycle manufacturer wants to grab a bigger share of the pie.

With competition getting stiffer, who roars away with how much will depend on how smartly they can read the market, work and rework their strategies and how quickly they can introduce a new model - or upgrade a bestseller.

The Rs 1000-crore Honda Motorcycle & Scooter India (HMSI), a fully owned subsidiary of Honda Motor Company of Japan, till now India's No. 1 scooter maker, has just tepped into the Indian motorbike market, which may trigger some interesting reshuffle in the market stakes.

"Honda for us also is like any other motorcycle manufacturer and is our competitor. We've to co-exist in this expanding market," commented Pradeep Saxena, Head-Marketing, Hero Honda, on Honda's foray into the bike market with Unicorn.

According to Saxena there would be no shift in Hero Honda's marketing strategy as of now. "This year it was a little topsy-turvy but we are sure the market will witness double-digit growth from here on," he said. "We have an estimated annual budget of Rs 150 crore for our marketing activities," disclosed Saxena. On Unicorn posing a threat to CBZ, he said, "CBZ is just 1 per cent of our business and moreover the market is big enough for everyone to make their presence felt."

During the launch of the Unicorn earlier this week, the MD & COO of Honda Motorcycle & Scooters India, Yukihiro Aoshima, said that the company would put out 15 new motorbike models in the near future. He ruled out any problems in facing the competition from Hero Honda's CBZ.

Ajay Sachdev, Executive Director-Marketing, LML, very competitively welcomed the entry of Honda in the bike market. "Honda has a very high badge value globally and Unicorn has a very competitive price tag," he commented.

Would there be a shift in the pricing or marketing strategy by LML to combat the increasing number of players? "Of late we've given some surprises, one can expect a few more from the LML stable," Sachdev commented. "New entrants in this industry create new opportunities and hence drive market growth. Like other players we too would be a participant in this growth."

"LML has been very aggressive in its advertising recently and we'll have our share of voice in the marketplace. Our advertising would be very competitive, but to quote a figure would be too academic. But LML would leave no opportunity unturned," asserted Sachdev.

Industry honchos' estimate of the growing market size is also supported by domestic sales data of SIAM (Society of Indian Automobile Manufacturer). In 2003-2004, the motorcycle/stepthrough segment is more than 77 per cent of total two-wheeler sales. Domestic sales of motorcycles/stepthrough in 2003-04 stood at 4,170,459 units (as on September 10, 2004).

Cecil K. Dewars, Head, Corporate Communications, TVS Motor Company Ltd.. also shared the view of the industry experts that new entrants, rather than suffocating the market, are helping to expand it. In a recent report for the 4-stroke motorcycles category, the TVS-M range of motorcycles comprising Centra, Victor & Fiero posted a higher growth of 28 per cent during 2003-04. On future strategies, he said, "The festive season is approaching and a lot should happen during that time; but it would be too premature to say anything right now."

Despite repeated efforts, a comment was not available from Baja Auto. The Pulsar from the Bajaj stable is likely to face stiff competition from Honda's Unicorn.

One can definitely conclude from the SIAM data and the industry experts' opinions that the Indian motorbike industry is all geared up for an action-packed season.

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