Saturday, April 05, 2008


Why Study Abroad When IIPM Gives You 3 global Advantages!

From men clad in bell-bottoms flaunting their legendary Lambretta to Chetak becoming the owners’ pride and on-lookers’ envy to modern day leather jacket clad youngsters doing vroom... on their mean machines... all this while, the twowheeler industry has held its cranium high.

However, in the current aeon (as compared to a decade back), the dynamics of the industry has undergone a 360-degree transformation. It has not only marked the end of the geared scooters, but bikes have increasingly started ruling the minds of Indian consumers and companies. Moreover, in case of bikes, the war between the makers is not restricted to mere cosmetic makeover. Instead, it has been elevated to the next level with technical makeovers becoming a part of the players’ arsenal. Hero Honda and Bajaj – the number one and the immediate follower introduced the revolutionary fuel injection in the two-wheeler segment (Hero Honda in Glamour and Bajaj in Pulsar).

And there were others too who jumped into the party... with greater enthusiasm (if you please!). There was TVS which made all preparations for that moment when these leaders would fail and it would pick up the momentum from where they left, walking away with the spoils...

And with its revolutionary products like Apache, TVS is no more a third choice for the Indian consumer. Then of course, can we forget the multinational titans like Suzuki and Honda Motors & Scooters India (HMSI) which are aggressively expanding their footprint on Indian soil and making huge progress when it comes to usage of advanced technology that too with an unshakeable do or die spirit. On a lighter note, the situation can well be described as a world war in the domestic twowheeler industry, and rightly so, since India is already the world’s second-largest two wheeler market.

Interestingly, in this era, it appears that scooters are making a strong comeback (with almost every player in the industry possessing at least one ungeared two-wheeler in its portfolio). And here too, the technological race has been flagged off. The scooter giant Bajaj has moved a step ahead of competition by introducing the fuel injection technology in the ungeared scooter space, which is at the moment dominated by HMSI.

Bajaj, which took the industry by surprise when it launched the Pulsar range, now plans to take biking in India to a new level by introducing 250cc+ bikes in collaboration with Japanese samurai, Kawasaki. It is also learnt that Bajaj is betting on the dual-fuel strategy and compressed natural gas powered bikes would be launched in a matter of a few months from now.

But having said that, it would indeed be wrong to predict a victor, as there are still a host of unplayed manoeuvres on the Indian twowheeler chessboard. Moreover, it will be interesting to observe the dynamics of the industry over the next half decade, since on one hand, Bajaj plans to move out of the bread and butter entry level segment of the industry in a phased manner, while Hero Honda continues to focus on that very segment with even HMSI planning an imminent entry into the space.

Well, what will payoff is a different story. As far as the industry is concerned, its future is positively sealed. With the two-wheeler industry continuing to grow at a CAGR of 15% for two years that is FY 2007-2009, and with all the two wheeler majors announcing major expansion plans (Bajaj Auto plans to invest Rs.15 billion over the next four years and Hero Honda plans to pump-in roughly Rs.4 billion in FY 2008 to take its total capacity to 4.4 million units from the current levels of 3.9 million units), the prediction for this robust industry will stump many a gloomy soothsayers.

However, in the long term, as the Indian market matures and the premium segment become the bread and butter of the industry instead, the current kings may have to face a series of bouncers from HMSI and Suzuki, taking into consideration their R&D edge especially in the premium space. But one cannot completely write-off Indian czars, more so since they have already started working in this direction. Intensive R&D, benchmark product launches and ultimately striking the right chord with consumers will be deciding factors for the success of this sector as a whole.

If the premium segment is hot, so are ultra-cheap cars. Can the industry overlook the threat that Tata’s and Nissan’s ultra-cheap (dream) cars would give to the current market pie of two-wheeled tycoons? Are they geared for it? We’re willing to wait, and so are you, we hope, for the future will tell tales of men that perished on burnt out two-wheels while on a high speed highway; and of kings that donned the crown and zoomed ahead, past all that mattered. Ah! and yes, on the very same Indian highway!

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2008

IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

For More IIPM Info, Visit Below....
The Sunday Indian - India's Greatest News weekly
IIPM Economy Review

No comments: