M&M's two-wheeler business needs to be driven by consumer: Viren Popli


20 June, 2012; CHENNAI: Auto major Mahindra & Mahindra Ltd, a late entrant into the two-wheeler space, doesn't want to target customers according to the long-followed industry norm of product capacity, said a top official.

Viren Popli, Senior Vice President of strategy and development of the company's two-wheeler business, said in Chennai on Wednesday, "The segmentation is in the mind of the consumer. And consumer usage and attitude towards the brand. So if I say I am into the 100 cc segment, it is difficult to play that game. It is our job to redefine." He said, "Too long we have been driven by engineering, we need to be driven by consumer."

Popli said this when asked if the company's focus would be on the 125 cc segment. He was in Chennai to launch the new Rodeo RZ scooter. The company says it has sold 3.5 lakh two-wheelers and has a market share of 7-8% in the scooter segment.

"We are the only industry now that defines our sales based on product capacity. The mobile phone industry is not defined on the basis of product feature - I have this processing power or that processing power. It's all defined very differently. Media is not," Popli said.

"This is the only industry that is kind of left untouched because traditional businesses have been running this. It is in their interest to perpetuate certain segmentation. And is it in my interest to change that segmentation," he said.

As an example, he cited Rodeo RZ, designed and marketed for "young urban families," while another offering Duo Diesel was targeted at the "old urban families." Popli said, "To me, 125 cc is not an important segment. For me it is they need more power, they need more storage."

"Look at the car industry that has gone from small car, medium car, big car, to a small car which is really small, small car that is not too small and a small car that is not small at all. Each one of them attracts a different car market segment. You can buy a small car for Rs 1 lakh or 25 lakh. In the two-wheeler industry, that's where the game is in the next 10 years," Popli said.


Source: M&M's two-wheeler business needs to be driven by consumer: Viren Popli - The Economic Times

If petrol costs go up 10%, so should our mileage: Keita Muramatsu


Though the share of entry-level bikes (100-110cc) in India has come down to 50 per cent from the historical highs of 80 per cent a few years ago, it still sees sales of 6-6.5 million units every year. Honda Motorcycle and Scooter India (HMSI), the country’s third-biggest two-wheeler seller, is trying to penetrate this segment with the new Dream Yuga, a 110-cc bike aimed mostly at the rural market. Keita Muramatsu, president and chief executive officer of HMSI, is targeting market share to increase to nearly a fifth of the local market, riding high on the Yuga, priced at Rs 48,028 (ex-showroom, Mumbai). On the sidelines of the Dream Yuga’s launch in Mumbai today, he talked about the company’s future plans. Edited excerpts:



(Questions are in italics, answers in plain text)

Are you looking at developing more India-specific models like Dream Yuga?
Honda Research and Develop-ment India (HRDI) is already located near Manesar, very close to our factory. We want to develop new bikes using Indian materials and technology. Already, the R&D (division) is using such materials. The Dream Yuga has nearly 100 per cent localisation; only some components are imported.

With the R&D facility growing, do you think you can have a bike entirely developed in India?
From the beginning, we have tried to develop a bike made from Indian materials, designed for Indian specifications. We have to check how we can make high quality, low-cost products like the Dream Yuga, which has high performance and high mileage.

How are you expanding sales network?
We are expanding our sales touch points to 2,000 this year from 1,500 last financial year. India is very vast and we would require more (sales points) in the future. The Dream Yuga is targeted at the rural market more than the urban market, because the Yuga returns the highest mileage in the Honda line-up world-wide.

What is the split between motorcycles and scooters?
The Activa scooter has strong demand, and is the largest seller in India. The split is about 50:50 now, but it could move slightly in favour of motorcycles with the launch of the Yuga. This could be 52:48 in favour of motorcycles.

You had a market share of around 15 per cent last financial year. How much will that grow this year with the Yuga in the market?
This financial year, we will have a total production capacity of 2.7 million. We could grow our market share to 17-18 per cent in the next 12 months.

What is the target for this year in terms of sales?
We have a target of selling 2.75 million units this year, of which the Dream Yuga will be 300,000 units. The two-wheeler industry is expected to grow at 12 per cent this year, but Honda has already grown by more than 50 per cent so far this year.

What effect do you see on demand with the rise in petrol costs?
The impact is felt on the four-wheeler segment more. In the two-wheeler segment, the customer may prolong his next buy, or change to a new motorcycle. But, if petrol costs go up by 10 per cent, then our mileage should also go up by 10 per cent. This is the challenge for Honda.


Source: If petrol costs go up 10%, so should our mileage: Keita Muramatsu

" Our Focus as of now, is the 150cc segment. "

-Interview: Hiroyuki Suzuki, MD and CEO, India Yamaha Pvt Ltd.At a time when the two-wheeler market in the country has been showing signs of moderation in growth, Yamaha has announced an investment of Rs 1,500 crore to expand capacity. Where will the numbers come from?
We have production capacity of 100,000 units at our existing plant. The new plant coming up in Tamil Nadu will add another 1.8 million units over the next five years. We are targeting sales of around two million units by 2016, of which 30 per cent would come from scooters. The 150-cc models will account for 40 per cent of overall volumes, while entry-level products such as the YBR110 and Crux will bring in the remaining numbers. We want a 10 per cent share of the two-wheeler market here by 2016.



In a market where over seven million motorcycles are sold in the commuter segment annually, Yamaha, with monthly sales of 5,000-odd units at the entry-level, has marginal presence in the category. Are you working on strengthening your portfolio there?
Our focus, as of now, is the 150-cc segment. Next on line is a gearless scooter for female customers that is scheduled for launch around the festive season this year. At present, we have no capacity for a mass market product. All additional capacity is under investment, both at the existing plant and in the new plant. From the new plant, I would like to develop a low-cost commuter motorcycle. This product would be sold not only in the domestic market but also be exported from Chennai to countries in Africa.

Honda has developed a bike priced below Rs 30,000 for the African market. Would Yamaha look at doing something similar in India?
The Crux, priced around Rs 38,000, is the cheapest in our portfolio. There would be a vendor park near our new facility in Chennai which will help us improve localisation and reduce production costs of Yamaha products. The target is to make a bike that will cost $500 (Rs 27,500). Such a bike will have a lot of demand in Africa, as well as in India.

How big a role would the Indian R&D team play in developing such a product?
Until this year, basic development of products was being done by Yamaha at our headquarters in Japan. We have an R&D centre to make minor changes on models in India. The R&D team here has 70 engineers. In future, our R&D team should be independent for developing the new motorcycle in the commuter segment. The investment for scaling up R&D work in India is under consideration. We already have a test-track near Chennai.

How much of your total production would you earmark for sales abroad when the new plant comes onstream?
The Chennai plant is the biggest in Asia. It is close to the port. A fifth of our total production would be exported from India by 2018. We already export bikes from the R15, FZ and SZ zeries to over 40 countries in Latin America, Africa and Southeast Asia. The new scooter, too, will be exported from this year. The plan is to export premium products to countries in South America and the Asean region, while entry-level products would be shipped to Africa.



Source: Our focus, as of now, is the 150-cc segment: Hiroyuki Suzuki

Bajaj - king of motorcycle universe ?

Source :Bajaj - king of motorcycle universe?The next big bet

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Its official, next Pulsar is 375 cc. Bajaj also devloping twin cylinder bikes

Source: Business StandardRajiv Bajaj-led Bajaj Auto, India's second biggest motorcycle producer, will soon start developing 400 cc super bikes for Austrian bike maker KTM.

Bajaj Auto, which holds 47 per cent equity in KTM, already manufactures Duke 125 cc and 200 cc models for KTM from the Chakan plant. Duke is sold in India as well as in Japan and Europe. Over the next two-three years Bajaj Auto will carry out all projects of KTM having engine capacities up to 400cc from scratch to final product. These include designing, styling, engineering, testing of engines and vehicles, most of which were hitherto done outside India.
Speaking to Business Standard, Rajiv Bajaj, managing director of Bajaj Auto says: "We have plans to rapidly go up from the 125cc Duke not only in terms of engine capacity but also in terms of styling and designing.
The new generation Pulsar 200NS shares its engine, the platform and a host of components with the KTM Duke 200. Both are manufactured from the same facility in Pune. However, both are priced differently in the market with the Pulsar being cheaper.
As per the mutual agreement between Bajaj and KTM, the Indian company will restrict itself from entering the space above 400cc for the time being. However, Bajaj could revisit its strategies over time. Bajaj is eyeing the segment a shade below -- bikes with engines between 400cc and 990cc. Bringing those beasts to India may be one hell of a ride.

Now its official that bajaj is developing high end bikes which include twin cylinder bikes. In couple of years we will see lots of models(5 to 6) bikes below 400 cc. The first one is expected in next 6-9 months which is not far away. Market is really heating up.

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Shirish Kulkarni, director of DSK HYOSUNG, is a motorcyclist at heart. Having started off riding a CBR 600 in college and then progressing on to an 1800, he now does what every thoroughbred motorcyclist can only dream of doing - owning his own motorcycle manufacturing company. We had a free wheeling chat with him earlier today and here's what he had to say. Take it away then, Shirish!


BSM: What's the update on the production plant that you had spoken about some time ago?
SK: The plans for the plant are on schedule. We have closed in on the location and it's a place called Lonand which is about 77 km away from Pune. The place boasts of good infrastructure and we intend to set up our facilities over about 100 acres of land. The implementation of this plan will be staggered, but construction on the first section should commence between December this year to January of next year. We intend to start production at the plant by 2013-2014.

BSM: Which motorcycles can we expect to be launched by DSK HYOSUNG in the coming future?
SK: We intend to launch the GV650 and the GV250 as soon as possible. These two bikes are our next priority launches.

BSM: Nothing in the smaller displacement segments in the future, then?
SK: Well, we have many plans for the long term. We intend to see ourselves as a mainstay motorcycle manufacturer in the future. We are in talks with Hyosung to produce a 150cc motorcycle by the end of 2014. By then, our network should have gone up to 75 dealers in all. By the end of 2015, we should be producing 125cc motorcycles as well. Both these motors will be single cylinders developed only for India. In fact, we are currently evaluating whether we could develop these engines in India itself with Hyosung's inputs. Depending on where the market takes us, we might also produce scooters. But if we do, we see ourselves manufacturing scooters in the 100 to 125cc segment only by 2016-2017.

BSM: How are you marketing your brand differently as compared to the rest of the manufacturers who are mainly seen in the Tier 1 to Tier 2 cities.
SK: We are percolating our brand even in Tier 3 cities. The North East will get more DSK Hyosung dealers. Patna, Bhubaneshwar, Nagpur, Solapur, Ahmednagar, Ludhiana, Chandigarh, Vijaywada and places around Chennai will have our dealerships very shortly. Kerala will have more of our dealers set up. This year is all about network expansion for us. We intend to have close to 30 dealers by March 2013.

BSM: What about exports? Are you looking towards catering to the international markets with your upcoming plant?
SK: Yes, we are very much interested in catering to the export market. In fact, we had talks with Hyosung with regard to manufacturing engines here in India for overseas markets and they have given us a positive reply. With regard to complete motorcycles, we might do this, but we will only manufacturer certain models. After all, Hyosung also has their Korean plant to manufacture out of. I cannot tell you when any of this will happen, but it is on the cards.


Source: BS Motoring.

Can the 'Moped King' revive TVS?

Source : Business Standard


However, Srinivasan has, just last month, been pushed to the fourth position in two-wheeler sales by Honda Motorcycle and Scooter India, which was recently freed from its association with Hero MotoCorp. Srinivasan declined to comment for this story despite being approached several times by Business Standard.

Eroding share
)
What could explain such a consistent decline in sales for a respected and established player, while other two-wheeler manufacturers have thrived?
Turning point

Srinivasan was proved right, as the company came out with the TVS Victor, a 110cc motorcycle that was the first indigenous product from the its stables, in 2001. The bike soon became successful enough to become the de facto brand ambassador for the company, and turned its fortunes around.

Weak spots
There were also failures. For instance, the TVS Spectra, its four-stroke scooter (and the first one in the industry), was considered a better scooter compared to rivals, such as the Honda Eterno. Yet, the Eterno succeeded while the Spectra failed. The reason is, the product was launched in a hurry and at the time, aluminium-based components for engine construction were entering the market, while TVS relied more on traditional, heavier raw materials. This meant that the unisex Spectra, at 130 kgs, was a good 40 kgs heavier than its competitors.




Cut-throat competition
Meanwhile, TVS announced at the beginning of the year that it planned to invest Rs 100-125 crore on product development and R&D. While the last two years have been bleak on the sales front for the company, Srinivasan says that they have been spent focusing on production, quality and supply chain, and for the next two years the company will introduce new products and into new geographies.
The fightback
In January, Srinivasan said the company will invest Rs 400 crore at Howrah, West Bengal over the next three years to increase production from 1,600 units per year to 240,000 units per year, in a phased manner.

Will these efforts work, especially when competitors like Bajaj and HeroMotoCorp are already so far down the line of product innovation and joint ventures?

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Hero to roll out first bike without Honda technology by FY14

Source : ET

India's largest two-wheeler maker Hero MotoCorpBSE 0.26 % today said it will launch the first product with its own technology by 2013-14 as it presses ahead the solo journey since parting ways with Japan's Honda.

Besides, the company will be introducing its bikes inAfrica and Latin America in the fourth quarter of this fiscal by customising the existing ones for these markets.

"We have technology partners like EBR, AVL and Engines Engineering. A lot of collaborations is already taking place and we will be launching the first product with our own IPR through these collaborations by 2013-14," Hero MotoCorp Senior Vice President (Marketing and Sales) Anil Dua told reporters here.

The company will roll out many more such products in 2014-15, he added.

Dua, however, declined to comment on details such as in which segment the first product will be launched.

"With EBR, we are focusing on the premium bikes, while with AVL and Engines Engineering, we are focusing in the other segments. We also have our own R&D, focusing on new product development," he said.

Last month, the company had roped in Italian two-wheeler design firm Engines Engineering to partner with it in bringing next-generation product line-up.

Earlier, it entered into technology sourcing pact with US-based Erik Buell Racing (EBR) as it looked to strengthen presence in the high-end bike segment. Later, it also tied up with Austrian engine developer AVL.

Talking about its export markets, Dua said: "We are going to look at the customers in African and Latin American markets and are going to tailor-made for them."

The company is looking at the motorcycle taxi segment in Africa, therefore, "we have to do customisation of products in our existing portfolio to suit that market", he added.

Dua also said the company is looking beyond Africa and Latin America in order to increase its sales volume globally as part of its plans to sell 10 million units in the next five years with exports to be about 10 per cent of its total sales.

Talking about the upcoming festive season, he said: "The market is down, but usually during the festive season sales pick up. It is unlikely that we will have a stupendous double-digit growth during the festive season, but I do believe it will be a single-digit growth."

During the July-September period, the overall industry sales were down by five per cent and Hero MotoCorp had adjusted its "production by two lakh units", he added.

"...but going forward, with sales picking up, the company expects its plants to run in full capacity during the third quarter," Dua said.

Hero set to launch own bike sans Honda tech in 2013

NEW DELHI: Nearly a-year-and-a-half after splitting with long-time partner Honda Motor of Japan, homegrown Hero group of Munjals is close to scripting a solo ride as it will launch its first bike, sans Honda technology, next year. The two-wheeler will be built by Hero's newly-established in-house R&D set-up that will work in tandem with the company's three overseas technology partners.
"We are working aggressively on this front and the first Hero-developed product should be out in 2013-14," Anil Dua, Sr V-P (marketing & sales) at Hero MotoCorp Ltd, told TOI here.
Hero, that has the option of using Honda's badging and technology till June 2014, has been working over-time to shed its association with its erstwhile Japanese partner. The company has dropped the Honda tag from its products earlier than scheduled and is focusing on quick independent product rollout. The new products will include motorcycles and scooters and are expected to be across the price spectrum of the two-wheeler industry.

Hero's R&D set-up is still in a fledgling stage as the company develops a full-blown facility in Rajasthan with an investment of Rs 400 crore. The new facility, spread over a 250-acre area, will employ over 500 engineers and will be operational in the second half of next year. Apart from its own set-up, Hero has also sticthed up ties with US-based Erik Buell Racing (EBR), Austrian engine developer AVL and Italian two-wheeler design firm Engines Engineering. "Our R&D will be doing the lion's share as far as the development of the bike is concerned," Dua said.
Hero and Honda had been promoter partners in the vastly-successful JV, Hero Honda Motors Ltd (HHML), that lasted for 26 years before heading for splitsville in 2011. Analysts had doubted Hero's ability to roll out new products on its own after the exit of Honda as the Japanese company was the sole technology supplier to the JV.
Dua, however, said the new independent products from the Hero stable will be as efficient as the company's existing products. "We will meet our own proven standards in terms of manufacturing quality, durability, re-sale value, fuel efficiency and running cost." Hero's solo strategy comes in as Honda has been expanding aggressively in the market. The company -- through its fully-owned subsidiary Honda Motorcycle and Scooters India (HMSI) - has already launched a 110cc bike 'Dream Yuga' that is in direct competition with Hero's best-sellers Splendor and Passion models as well others from Bajaj Auto. Hero's sales in the first-half of this fiscal are under pressure just as HMSI has witnessed a big surge in volumes.
Hero's volumes in the April-September 2012-13 period are down 3% at 28.94 lakh units just as HMSI saw numbers go up by 49% 12.90 lakh units.

Source: Hero set to launch own bike sans Honda tech in 2013 - The Times of India

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Export mkt has stabilised; worst is behind us: Bajaj Auto - CNBC-TV18