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Hero, Bajaj compete for premium segment biz
30 Mar, 2011, 04.17AM IST, Lijee Philip & Chanchal Pal Chauhan,ET Bureau
MUMBAI | NEW DELHI: Hero Honda and Bajaj Auto, the two largest motorcycle manufacturers in India, are getting embroiled in a battle for the fast-growing premium two-wheeler business. The BM Munjal group company wants to step up efforts to counter falling market share in the premium segment.
With Bajaj Auto focusing on strengthening its hold over the segment, Hero Honda- the country's largest two-wheeler maker-is left with no option but to follow suit and step up strategic initiatives to catch a bigger pie of the premium market. According to data from apex industry body, Society of Indian Automobile Manufacturers (SIAM), Hero Honda has steadily lost its overall market share to 54% in Apr-Feb FY11 from 59% in FY10 and 75% in FY09. Its share of the premium segment has fallen to 13% in Apr-Feb of FY11 from 29% in FY10 and 34% in FY09. In the mid segment, its share has declined to 71% in Apr-Feb FY11 from 75% in FY10.
"The premium segment is the most profitable segment, as a good product will give the manufacturer better margins," said Mahantesh Sabarad, analyst with Fortune Financials. The profitability ratio between Bajaj Auto's entry-level bike Platina and premium Pulsar is around 1:8, he said. "Two-wheeler players want to be seen as top-end player too as it helps improve their image and margins," said Abdul Majeed, auto expert with PwC.
To tap the premium segment, Hero Honda is setting up special dealer zones for different two-wheeler categories, offering premium facilities for mass market bikes, revamping research and development, creating different marketing verticals, and starting a used-motorcycles business for the first time in the history of Indian two-wheeler market.
The company has increased advertising spend for its premium bikes like Karizma ZMR and repositioned some of the mid-segment bikes such as Splendor Pro and Passion Pro with additional premium features. The company is also offering some of its premium two-wheeler features - such as electric start (instead of a kick start), mag wheels (instead of spoke wheels), and better aesthetics - even in the mid-segment bikes to lure customers.
Source : Hero, Bajaj compete for premium segment biz - The Economic Times
MUMBAI | NEW DELHI: Hero Honda and Bajaj Auto, the two largest motorcycle manufacturers in India, are getting embroiled in a battle for the fast-growing premium two-wheeler business. The BM Munjal group company wants to step up efforts to counter falling market share in the premium segment.
With Bajaj Auto focusing on strengthening its hold over the segment, Hero Honda- the country's largest two-wheeler maker-is left with no option but to follow suit and step up strategic initiatives to catch a bigger pie of the premium market. According to data from apex industry body, Society of Indian Automobile Manufacturers (SIAM), Hero Honda has steadily lost its overall market share to 54% in Apr-Feb FY11 from 59% in FY10 and 75% in FY09. Its share of the premium segment has fallen to 13% in Apr-Feb of FY11 from 29% in FY10 and 34% in FY09. In the mid segment, its share has declined to 71% in Apr-Feb FY11 from 75% in FY10.
"The premium segment is the most profitable segment, as a good product will give the manufacturer better margins," said Mahantesh Sabarad, analyst with Fortune Financials. The profitability ratio between Bajaj Auto's entry-level bike Platina and premium Pulsar is around 1:8, he said. "Two-wheeler players want to be seen as top-end player too as it helps improve their image and margins," said Abdul Majeed, auto expert with PwC.
To tap the premium segment, Hero Honda is setting up special dealer zones for different two-wheeler categories, offering premium facilities for mass market bikes, revamping research and development, creating different marketing verticals, and starting a used-motorcycles business for the first time in the history of Indian two-wheeler market.
The company has increased advertising spend for its premium bikes like Karizma ZMR and repositioned some of the mid-segment bikes such as Splendor Pro and Passion Pro with additional premium features. The company is also offering some of its premium two-wheeler features - such as electric start (instead of a kick start), mag wheels (instead of spoke wheels), and better aesthetics - even in the mid-segment bikes to lure customers.
Source : Hero, Bajaj compete for premium segment biz - The Economic Times
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