The next big frontier is BS VI and the costing challenges
The fiscal gone by has been heady for two-wheelers with production/sales numbers crossing the 20 million mark. In the process, it has only strengthened India’s position as the world’s largest producer of bikes and scooters.
Hero MotoCorp and its former ally, Honda, account for two-thirds of the market, which translates into a little over 13 million units. TVS Motor and Bajaj have 6.7 million two-wheelers between them, while Royal Enfield is rapidly inching towards the one-million mark with 2017-18 recording over eight lakh units.
Suzuki, which has been quite aggressive in recent times, had reasons to uncork the champagne with sales of over five lakh units and is determined to cross the one million unit mark by 2020. It will then be ready to begin production at its second plant, tipped to be a toss-up between Andhra Pradesh and Telangana.
Yamaha, which follows a calendar year, was within sniffing distance of one million units in 2017 and is on course to achieving this during the remainder of ‘18. Going by the growth trends, there is every reason to believe that India’s two-wheeler production will be close to 25 million units by 2020.
Looming emission norms
Beyond numbers, manufacturers will have their hands full over the next two years in meeting Bharat Stage VI emission norms, which come into force on April 1, 2020. This will mean coping with the costing challenge on fuel injection equipment, no mean task in a price-sensitive market like India.
Honda is reasonably confident that it can meet this head-on by leveraging its global competencies as well as making the most of the volumes generated in the subcontinent. It believes that this will be an inflection point in the leadership stakes from 2020 when people will have a good reason to understand what a number one brand means in technology. Consequently, the numbers will also start pouring in and it will be interesting to see if this will be enough to surpass Hero. The Indian company is, of course, in no hurry to give up its top slot and has managed to stay tall over the years following the parting of ways with Honda. Sceptics were certain that it would only be a matter of time before Hero was relegated to the sidelines but nothing of the kind has happened. The Splendor is still going strong and coupled with Hero’s formidable retail network, it is not going to be easy for Honda in the leadership stakes.
TVS Motor has been showing strong growth for some years now and the Jupiter has emerged a strong scooter brand after the Honda Activa. In motorcycles, the Apache is doing brisk business too while the recently-launched NTORQ 125 has made a strong statement in technology.
Bajaj Auto has been covering lost ground in motorcycles where its Discover brand has been reintroduced with the 110 and 125 cc motorcycles. Its Pulsar continues to be the top-seller in the sports segment while the more contemporary Dominar 400 has also been seeing a gradual upswing in sales.
Focus on alliances
Beyond its own brands, Bajaj and KTM have strengthened their alliance over the last decade with the Chakan plant near Pune now becoming a critical manufacturing hub for the Duke motorcycle brand. These are exported across the world and next year will see Husqvarna joining the KTM assembly line at Chakan.
Bajaj will also be hoping for a similar success story with Triumph of the UK, where the alliance will see mid-size motorcycles developed in India and shipped out globally. There have also been talks of an electric scooter making its debut during the course of this year though there has been no official confirmation from Bajaj on this subject.
Royal Enfield has been on a strong growth curve and is now keen on stepping up its global presence too. The Bullet manufacturer has been pulling out all the stops to establish itself as a strong brand in the cruiser segment where it has made a strong connect with its user base. Royal Enfield is now looking at ASEAN and Latin America as the next big growth drivers, with Europe also likely to be part of the parade.
Suzuki, likewise, is planning to go flat out after 2020, when its second plant should be up and about. India is now its largest market and the company is keen on using the competencies here to reach out to other parts of the world. Suzuki has also decided to focus on premium scooters and motorcycles since there is just no point attempting to take on established players like Hero and Honda in the commuter space.
Yamaha, likewise, believes that 2020 could see India emerge as its largest market, ahead of Indonesia. Yet, there is a lot of work ahead in terms of taking on competition both from MNCs and local players. All in all, the country is going to see a lot of action in the two-wheeler space!
via by Thehindubusinessline