Anticipating a shift in consumer preference, two-wheeler manufacturers are gearing up to give a big push to 125-cc class motorcycles in the coming months.
The word in the market is that big volumes in the two-wheeler market will shift from 100- and 110-cc bikes to 125-cc bikes in the next two to three years. At the moment, 100 cc bikes account for 70 to 80 per cent of the sales.
Market leader Hero Honda will be launching its 125-cc model early next calendar year. Though the company has not made any official announcement of its plans, market is abuzz with talks that it would carry the Splendor name plate and will be pitted directly against rival Bajaj Auto Limited's (BAL) hot-selling Discover DTSi.
An LML executive said, "The 110-cc is turning out to be a sub-optimal engine while 125 cc gives a better fuel efficiency and power. The basic commuter segment is shifting towards 125 cc." LML will relaunch its 125 cc Freedom in the market from March-April next year.
The present size of the 125-cc class market is estimated at 45,000 units a month. The market leader in this class, BAL is at present selling around 25,000 units of the Jackie Chan-promoted Discover DTSi.
TVS Motor and industry leader Hero Honda account for another 20,000 units a month with TVS Victor and Ambition respectively.
BAL's head of marketing, R L Ravichandran said the expectation of a market driven by 125-cc is not too far-fetched. This new market driver will, however, have to be offered as a complete package of good mileage, power and price in the price band of Rs 40,000 to Rs 42,000, which he believes is feasible.
An industry observer pointed out that Hero Honda's plans to launch a 125-cc bike early next calendar year will be a good pointer on the shape of things to come.
According to TVS Motors' chairman and managing director, Venu Srinivasan, "We can expect the 125-cc bike market to reach the 100,000 units a month in the next one year. TVS Victor is giving good numbers. It would, however, take two to three years for the 125-cc become a growth driver in the market," he said.
Ravichandran said, "We expect to cross sales of Discover to reach 40,000 units a month by March next year." He added that buyers at the entry level do not look at the power of the bike anymore but buy the whole package.
"Customers do not look at the CC. They want a whole package. Hence, for a 125-cc bike to become a driver of the market, it must have the benefits of a 125-cc at the cost of a 100-cc," he said.
Other believe the 100-cc bikes will continue to dominate the market. Hero Honda's executive director, Atul Sobti, believes it may take over two years for the 125-cc bikes to gain ground.
"The pace at which the middle-class population is growing, the demand for 100-cc bikes will continue to dominate in the near future," he said.
"The 100-cc bikes constitute 70-80 per cent of the total sales while power bikes starting from 125-cc contribute only 10-20 per cent." he pointed out.