A New Era Of Superbikes Is Upon Us
Angad singh narula, a 37-year-old corporate lawyer in Delhi, is a passionate biker and prominent member of G.O.D.S (Group of Delhi Superbikers). Having switched multiple hi-performance bikes over the last decade, he currently owns a Honda Goldwing (also known as Rolls Royce of motorcycles) which is priced upwards of Rs 30 lakh. His next will be the next generation of the same model.
Narula says, “I have vowed that I will own only one superbike at a time that I will use optimally and judiciously.”
Interestingly, avid superbikers like Narula, usually buy their mean machines in cash rather than getting them financed (prevalent in mass and other segments). With the widening high-networth individuals (HNI) base driving magnificent growth in the Indian superbikes market, global premium motorcycle brands are taking rapid strides in enhancing their foothold in the world’s biggest two-wheeler market by volume.
Despite constant obstacles such as demonetisation, volatile fuel prices, surcharge on GST, rising input costs, changeover in emission and safety norms, etc., this is the only segment in the two-wheeler market that has been growing at a steady pace over the last decade.
Market Size & Key Players
There are close to 20 manufacturers in the superbike segment — comprising motorcycles in the 500cc category and above — present in the country. From a paltry figure of 500 units a decade ago, the size of the overall market went up exponentially to more than 8,000 units in 2016. Region wise, Delhi and NCR have the biggest base of riders followed by Mumbai, Hyderabad, Bangalore and Pune. Of late, the demand for superbikes from smaller cities such as Indore, Kochi, and Chandigarh has grown.
According to recently published report ‘India Premium Motorcycles Market Forecast and Opportunities, 2022’ by management consulting firm TechSci Research, the high-end motorcycle market has grown at a CAGR of 25 per cent (approx) in terms of volumes and 17 per cent in terms of value over the last five years. From 3,334 units per annum worth $60 million in 2012, the market size is estimated to stand at 8,400 units per annum worth $120 million by 2017.
Target Customers and Growth Drivers
The outlook for premium motorcycles in India seems very promising as the overall consumer spending and the high net worth individual (HNI) population is on the rise. The improved infrastructure and better quality of roads are additional growth drivers.
Karan Chechi, research director with TechSci Research, says, “The increase in the number of HNIs in India, with a salary of more than Rs 50 lakh/annum, has been one of the major drivers in the growth of the premium motorcycle market. True bike lovers feel that these premium products enhance their personality, status and provide true adrenaline-based driving thrill.”
Pankaj Dubey, managing director and country head of Polaris India, reveals, “The desire to own a piece of luxury is acting as an incubator for the superbike segment. The change in the biking culture in India has the potential to completely alter the premium luxury bike landscape in the country and usher a brand new era of bikes.”
Conceding with him, says Triumph Motorcycles India MD Vimal Sumbly, “What is activating it further is the infrastructure projects taken up by the government such as modern roads and highways apart from the Smart City projects. Plus, an Indian today is going global in his outlook and approach and wants to experience luxury in his own space. I think from that perspective; India is a destination that nobody can ignore.”
According to World Wealth Report 2016 released by Capgemini, India has 0.2 million HNIs, and is ranked 12 in the list of countries with the highest number of HNIs.
Rulers of The Roads
The big bike market in India is currently lorded over by Royal Enfield and Harley-Davidson largely because both of them also offer lighter, sleeker and less powerful models other than the usual fare, in order to appeal to the pocket of well-heeled novice riders, including women. However, other players are unfazed as they feel the domestic market is huge and there is scope for everyone to grow.
Says Sajeev Rajasekharan, executive vice-president of sales and after-sales at Suzuki Motorcycle India, “We have sold more than a thousand big-bikes, of which Hayabusa contributes more than 80 per cent to the total sales. In 2016, we began the assembly of this iconic motorcycle at our assembly line inside our local facility. We command a 35.3 per cent marketshare of the total segment (800cc and above sports bikes) as per SIAM data.”
The Sweet Spot
In the superbike segment, motorcycles between 500cc and 800cc are the fastest growing and the most desirable category. The segment currently accounts for the biggest share in volume terms in the premium motorcycle market at 52.37 per cent. The local assembling by original equipment manufacturers (OEM) has been the key reason motorcycles are available at a lucrative price point. Industry analysts predict a 16.48 per cent CAGR growth of the category in volume terms in the coming years.
“Premium motorcycles with engine capacities ranging from 500cc to 800cc offer better manoeuverability vis-à-vis high-powered motorcycles and are therefore a bit more suitable for rough Indian roads and uneven terrains. Major global motorcycle manufacturers are expected to sharpen their focus on this segment to offer a product specifically tailored to satisfy customer requirements,” says Chechi.
Siddhartha Lal, MD and CEO of Eicher Motors (Royal Enfield’s parent company), was quoted saying to the media, “In the developing and the developed markets, consumers are converging to the middleweight segment (500cc to 750cc) in the coming years.”
Triumph is also working on a 500cc cruiser for the Indian market in technical collaboration with Bajaj Auto.
‘Make in India’ and Exports
The booming premium motorbike market in India was underpinned by the increasing trend of completely knocked down and semi-knocked down assembly operations by OEMs that resulted in the decline of average selling price of premium bikes.
Kinetic Group’s venture of multi-brand superbikes named Motoroyale (which also retails MV Agusta and SWM), recently announced a joint venture with British motorcycle marquee Norton, under which Motoroyale will sell Norton bikes in the domestic and other ASEAN markets.
Says Stuart Garner, CEO, Norton Motorcycles, “India as an important region for Norton. That is why, it (Motoroyale) is not just a distribution partnership but actually an equity joint venture. We will be setting up our manufacturing facility in Pune; I imagine an overall capital and resources in excess of $20 million will get into the business. In phase 1, we will be distributing our products in India. Eventually we will export to Indonesia, Malaysia, Thailand, Singapore and other ASEAN countries.”
Before 2011, high-end bikes were imported into the country as completely built units (CBUs), which resulted in the imposition of heavy custom duties of more than 100 per cent. But after Harley Davidson entered India in 2010 and began establishing its domestic assembling plants here, the market scenario changed significantly. And now, with the implementation of the Goods and Services Tax (GST), things have further streamlined as there is a uniform rate of 31 per cent tax (28 per cent tax + 3 per cent cess) across the nation for motorcycles with engine capacities greater than 350cc.
Projected Outlook
The Indian premium motorcycle market is projected to grow at a CAGR of approximately 17 per cent in volume terms thus reaching a market size of 18,000 units per annum by 2022 in volume terms, claims the TechSci Research report cited above; it also maintains that the growth of this segment in value terms will nearly treble to $300 million.
Some players believe the Indian luxury motorbike market can even outperform the Chinese market in the next decade or so. Says Ravi Avalur, former MD of Ducati India, “India has a strong cultural heritage of motorbike rides. People here ride bikes not only because they want to go from point A to B but also because they enjoy this experience. Secondly, China’s restriction on the use of motorcycles within the city and a very high cost of ownership due to limited numbers of licence issued gives India an edge. I believe that in the times to come, higher capacity bike volumes will outperform China. Once that happens, we are likely to generate higher volumes in India than China. India is already one of the biggest markets for us in Asia.”
