Saturday, April 21, 2007

Bigger, Faster, Meaner,,, The big bikes are coming

With the government allowing import of all Euro III emission norms compliant bikes of 800cc and above, nearly all the super-luxury motorcycle manufacturers, including Honda, Yamaha, Suzuki and Harley Davidson, are planning to ply their roadsters on Indian roads. The government's move came last week as a quid pro quo for allowing exports of mangoes to the US in return for Harley Davidsons.

Bikes can be imported by individuals, companies and firms or original equipment manufacturers (OEMs) who have manufacturing and service network in India. Commerce and industry minister Kamal Nath also said the government is looking into suggestions to reduce the 60% import duty (and 43% of other surcharges) on such bikes.

The industry appears set to lap up the relaxed norms though the industry remains anxious about the exact demand which is projected to be in the wide range of 6,000-12,000 bikes per annum. Yet, with each costing between Rs 7-10 lakh, it could create a new segment of between Rs 420 crore to Rs 1,200 crore. Currently, Royal Enfield is the only domestic player producing high capacity bikes of between 350-500cc. Its costliest product, the 350cc Thunderbird, sells at Rs 93,200. But with disposable income on the rise and the economy booming at close to 8.5%, these bike makers hope demand would be better than what they expect.

Since the iconic bike maker Harley Davidson has been lobbying with the government to ease import norms for at least two years, imported Harleys will most likely ply on Indian roads before the end of 2007. Sources say Japanese automaker Suzuki Motorcycles has also finalised import of its 1000cc Sportster GSX-R 1000 (Rs 9 lakh) and the 750cc GSX-R750 (Rs 7 lakh). A decision on this is expected within May. However, Suzuki Motorcycles India vice president, marketing, Atul Gupta, said, “We have not yet decided which bigger bikes have to be brought into the country. We are still studying the notification issued by the commerce and industry ministry and will take a final decision within 30 days as to which product has to be launched and when.”

Compatriot bike maker Yamaha too is planning to capitalise on the new norms by tapping the high-end sports bike market with its MT01 (Rs 8 lakh) and YZF R1 (Rs 10 lakh). It is believed to have firmed up plans to roll out these bikes by the end of this fiscal.

Another motorcycle manufacturer and Honda’s wholly-owned subsidiary, Honda Motorcycles and Scooters India Ltd (HMSI), would also launch completely built units (CBUs) of higher capacity (500 cc) motorcycles in the next few years. It may even assemble these bikes within the country to avoid high import duty of over 100%. “We aim to be present in every segment of the domestic two-wheeler market and hence plan to launch higher displacement bikes (above 500cc),” said Y Aoshima, president and CEO, HMSI.

But Pradeep Saxena, senior vice president, TNS Automotive India, is not very bullish. “The landed price range of these motorcycles would start at around Rs 5 lakh and hence the customers for that are very limited. The super bike market would not be more than 1,000 units per annum.”

There are brands like Ducati and Harley which would find customers easily but not all, added Saxena. But a company such as Honda which already has a wide network of dealers and an on-going business, would also sell a good number of bikes, he added.

Still, other major sports bike makers - like BMW—aren’t very bullish on the Indian market yet. Motorcycles are still used in India as a means of transport. Our luxury and high-end bikes are too costly to be launched in the Indian market and that is why we have not yet decided to bring our bikes here. But if there is demand, we may take a call,” says Peter Kronschnabel, president of BMW India.

Though bike aficionados in the country have reasons to cheer, but are they willing to pay for the super bikes? The cheapest Harley, for instance, costs Rs 4 lakh, as much as the cost of two Maruti 800s. Nearly everybody is hoping consumers will begin to separate luxury from utility. After all, not only are global bike makers eyeing the segment, even home-grown two-wheeler manufacturer Bajaj Auto is planning to launch higher capacity bikes in technical collaboration with Kawasaki. There 1st Bike will be the Kawasaki Ninja 250 and they will be launching a 300cc and 400cc Pulsar somewhere around next September. The concept model will be showcased on 2008 Auto Expo.

Source:- FinancialExpress