Majestic looks. Thundering sound. And swift like a wild cat. These strapping beasts are not so rare to come by. Superbikes, which were rarely to be seen on the Indian roads a decade ago, are now a luxury that many with high-disposable incomes can well afford.
Motorcycle mania is after all beginning to take hold of the Indian rider.
The superbike market, which was roughly at 450 units a year in 2007-08, crossed 10,000 units last fiscal year. With the market size expected to touch 20,000 units per year by 2020, major global motorcycle manufactures have driven themselves into the Indian market in the last five years and are now competing for brand status.
Manufacturers are trying to lure Indian riders who are not afraid to spend a bomb to own a heavy engine capacity two-wheeler. “In the last five years, the earnings of young professionals have increased significantly,” says Abdul Majeed, partner at PwC and auto expert. “Now they have the money, the product, and the passion for leisure biking and the segment will only witness growth in the future.”
Money Matters
Superbikes are super cool, but super expensive too. To make them more accessible, Harley and other manufactures have direct tie-ups with banks to ease the financial process. Banks such as SBI and HDFC offer loans specially for superbikes.
Even manufactures’ decision to import bikes under complete knock down (CKD) banner rather than complete build units (CBU) has helped them to bring down costs, making the superbikes affordable for young buyers. “Strategically importing under the CKD banner from a country like Thailand which has a free trade agreement with India attracts custom as low as 10 per cent,” says Majid. Luxury bikes imported as CBU lures very high rate of customs, 60-75 per cent depending on the engine size. Most manufacturers have set up local assembling facility in Haryana to cut down costs.
Revving Up Sales
Expecting strong growth in future, companies have begun creative marketing to encourage sales. Recently Triumph Motorcycles, India conducted a training session for Tiger series customers in Pune to encourage adventure motorcycling. While arch-rival Harley-Davidson imparts basic riding skills to riders under its initiative ‘Passport to Freedom’, the Italian sports-bike maker Ducati is planning to open a riding school in India. For manufacturers, such experiential marketing is a better option that investing a chunk of money in mass marketing as that won’t spur sales in near future, The market is still in a nascent stage. “The market isn’t large enough to go for mass marketing. Indulging more in experiential marketing in early years helps in building brand which eventually lifts future sales,” says Vimal Sumbly, managing director of Triumph India.
Not just the global companies, DRIVEN — a Hyderabad-based startup— which serves exotic coffee and self-drive services, is making money by renting superbikes. Ashwin Jain, co-founder of DRIVEN, says, “Many youngsters can’t afford a superbike but desire to ride one. We are fulfilling their dreams by renting superbikes for nominal charges.” A Harley 750 from DRIVEN for a day costs Rs 2,100. Overwhelmed by the response, Jain who rides a Triumph’s cruiser Thuderbird, is planning to take DRIVEN into 14 cities.
Exclusive Club
“Riding is a passion for me. Being a part of a coveted bike club, I get to meet other enthusiasts,” says Bobby Desai, executive coach and trainer and a Harley Iron 883 owner. The biking culture encouraged by manufactures has started yielding results. Not only is it bringing people like Desai together with like-minded riders but is also encouraging many silent spectators to take up biking, a symbol for independence for them. Today, hundreds of bikers can be seen roaring through the wide lanes of expressways over weekends on their monster machines.
Besides exclusive ownership groups such as HOG (Harley Ownership Group) and R.A.T. (Riders Association of Triumph), there are more than a 100 well-known biking clubs operating across the country. The biking culture is slowly catching the attraction of women too. Veenu Paliwal, India’s first lady rider broke all stereotypes when she took to two-wheelers in the early 90s. Last year she bought herself a Harley to cover the whole of India on her superbike — a distance of 50,000 km. Sadly she lost her life in a road accident last month in Madhya Pradesh during her conquest ride. Just like Paliwal, hundreds of women have begun riding superbikes in the recent times. Women centric bike clubs such as Bikerni and Riderni have come up to cater to the needs of members.
From organising and sponsoring regular rallies, to ensuring the new culture of biking expands its horizons, the clubs do it all. It helps to retain customers while bringing in new ones through word of mouth. “Promoting the leisure biking culture has remained our topmost priority. Once that culture is developed, sales come automatically,” says Vikram Pawah, managing director, Harley Davidson India.
Majeed of PwC says as profits are impossible to generate in the first three to five years, the companies focus more on brand building to work for them in the long run. He says “India is a market that no one can ignore. Manufacturers will continue to promote the new biking culture to fulfill their future objectives.”
The growing popularity of the new biking culture was seen at its best in the recently concluded India Bike Week 2016 where there were more than 12,000 riders attending the event. The festival, which was earlier dominated by Harley, saw a line-up of global manufacturers such as Triumph, Ducati, and UM Motorcycle encouraging riders and unveiling new bikes for Indian buyers.
Who Rules the Indian Roads?
If Harley has volumes, Triumph boasts of options. And now, Ducati is back too. While Triumph says it is here to be the market leader, Harley is definite that it will continue to lead. “We will lead unapologetically and boldly,” says Pawah of Harley.
For Harley, an early entry gave it an edge over competitors. “We entered the market in 2009 to evaluate market potentials and we did it successfully. We will definitely remain leisure bike lovers’ first choice in the years to come,” said Pawah.
The popular American cruiser brand opened its first outlet in July 2010 and since then it has sold over 12,500 bikes, claiming a market share of over 65 per cent. The company believes its legacy, wide distribution network and experiential marketing strategy will keep it ahead in the race.
Harley’s top competitor, the UK based Triumph which offers bike in maximum categories plans to become market leader by increasing its market share in each category — classics, cruisers, roadsters, adventure and super-sports.
It has sold an impressive 2,500 units in just over two-years. After opening its maiden store in November 2013, the company has now network of 12 dealers. “Unplanned entry in the Indian market has backfired global players in the past. From launching bikes to opening outlets, we do a great deal of study to ensure success,” says Sumbly. Triumph claims to have a market share of 30 per cent in bikes with engine capacity of 500cc and priced above Rs 5 lakhs. It sells bikes in the price range of Rs 7 lakh-25 lakh.
After taking a pause in early 2014, Ducati re-entered the Indian market in June last year with a bang by opening one its largest sales and service facility in Delhi NCR.
Pierfrancesco Scalzo, Ducati Asia general manager - Sales and Marketing, says, “The Indian market is consistently and steadily growing which is a good sign for our bikes. The response so far we had received for our bikes is overwhelming.”
In less than a year it opened six outlets and plans to open two more. Majid of PwC says Ducati has managed to clock decent figures in its second inning with its Scrambler model being one of the most sought after bikes in the entry level segment. Ducati bikes in India fall in the price range of Rs 6.5 lakh-Rs 40 lakh.
BUMPY RIDE
A look at how the three luxury bike brands fared in the global market in 2015
* Ducati’s revenues were up from €575 million in 2014 to €702 million in 2015
* Harley’s revenue was down to $6 billion in 2015 from $6.3 billion in 2014
* Triumph’s previously reported statement shows its revenue was down to £364 million in the first half of FY 2015 from £369 million during the same in FY 2014
arshad@businessworld.in;
@arshadkhan_bw
BW Reporters
The author is Senior Correspondent with BW Businessworld
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