'Indian Luxury Motobike Market Will Outperform China'
Ducati Motor Holding, an Italian company that designs and manufactures motorcycles, re-entered Indian market in 2015 after a five years hiatus. Within a year of its second innings, the Indian arm of the Bologna-based firm notched up 1,000 units by December 2016.
In an interview with BW Businessworld,
Ravi Avalur, MD Ducati India stated that the company intends to double volumes in next year on back of new launches. He has also affirmed that Indian luxury motorbike market will go past China.
After making a re-entry into the Indian market, how has the journey been for you? Are you happy with the way things have shaped up?
The journey has been very exciting for us. We have built a nucleus of a network that we can now further expand. We have already got six dealers across the country and this time around we have made sure that operate world class dealers with global standards for sales, services and spare parts. We are ramping up our dealership network to nine cities by this year end. We already have dealers in Bombay, Delhi-NCR, Bangalore, Ahmedabad, Pune and Kochi and are expanding our network to Calcutta, Chennai and Hyderabad. Subsequently, we may have additional dealers in key metro cities.
How important is the Indian market for you and how big are you betting on it?
India is a very important market for Ducati. The only subsidiaries we have in Asia are India, China and Japan. That gives you an idea of how important the Indian market is for Ducati globally. All over the world, we have subsidiaries only in North America, England, Western Europe, and Brazil. From April 2015 to December 2016, we have sold 1,000 units. With the new Monster 797 and 950 models, Ducati has increased its portfolio in India. We would like to double the numbers in a year or so. To achieve that feat, we will be rolling out three models models i.e. Desert Sledge, Café Racer and Supersport during this calendar year.
Which models give you the maximum volumes?
When we first entered India, we saw an interesting trend towards our more expensive models like Panigale and Diavel. Now as we entered our third year of operations, what we are seeing is a rationalization of that demand. We are now selling more entry-level bikes like Monster 797 due to its affordability.
Would you like to explore the middleweight segment which could be a bit more affordable for your prospective customers?
What I can say is that currently our focus is on the premium (heavyweight bike) segment of the market and our entry point in the Ducati range is the Monster 797 at Rs. 7.77 lakh. That being said, we are open to the possibility of going below this model.
As there is a lot of hype about 'Make in India' and your competitors like Triumph, Harley, etc, toeing a similar line, would you like to take a cue by locally building the products in the country?
I respect the Make in India campaign (by the Prime Minister) as it is a significant move. When a manufacturers chooses (to make in India), it has to be sustainable. We are already having a Free Trade Agreement (FTA) with Thailand and given the investments that we have made in that country, it is not necessarily going to make our products affordable by assembling or manufacturing (the bikes) in India. Since some of our competitors did not have that (manufacturing) infrastructure in Thailand before, it made sense for them to assemble the products here which is a good strategy. Our strategy is to use Thailand as the (manufacturing) base for this region (India). We are offering a Thai-built Monster 797 at a reasonable price. I don't think only assembling in India will alone bring down prices and that will influence Consumer behaviour. The consumers' buying decisions are driven by robust aftersales services and a world class showroom. Having said all that, we are not ruling out the possibility of assembling our product lines in the country. We will be continuously evaluating what might be better for us in the medium term to long term.
As you know there are a handful of heavyweight bike sellers in the country. How would you differentiate yourself from your peers?
One of our unique defining characteristics is that our bikes have a sports DNA. Secondly, there is an element of Italian design and style which no other motorcycle manufacturer in the world has. Our target group is very much premium customers who look for the highest quality and value rather than the lowest price from what he is buying. They are very well informed, technologically conscious, value-seeking and mindful when it comes to buying products. There is a wide spectrum of people riding our bikes and that includes CEOs, CXOs, airline pilots, our ambassador (to India), military officers, pilots, military officers, etc. What unites them is passion for motorcycling and for the brand Ducati.
What strategies are you working on to enhance your marketshare?
We have rolled out a Desmo Owners Club, which is open to anyone having a passion for Ducati. We already have our club in Mumbai, Pune and Bangalore and are close to finalizing a club in Delhi. Ducati has also started Ducati Ride Experience, a rider training centre. We already have trained instructors and will start running basic and intermediate courses at our key dealerships like Bangalore shortly. Going forward, we are kick-starting road shows, typically for tier-II cities, where there is a latent demand.
As the GST rates are getting implemented on 1st July, 2017, how are you gearing yourselves up accordingly?
I think this (GST implementation) makes it a level playing field across the states as we will have a common ex-showroom price across the country. Of course there will be challenges in the transition period. But it will make the whole process simpler as the VAT gets subsumed in GST. By and large, I see it as an advantage as it will simplify the stocking and distribution of motorcycles and parts.
What is the size of the heavyweight bike market in India and what is your current marketshare in that segment?
We have registered a growth of 18% in 2016 in a market that grew by 4.6%. Ducati's market share grew from 6.4% to 7.7%. The Ducati Multistrada was the leader in its category with an 89% share. Ducati India expects to double India sales in two years.
As the Indian two-wheeler market is getting bigger in terms of volumes, do we foresee the luxury bike segment outnumbering China?
Yes, that could be a possibility in the future. This could be because of various reasons. First of all, India has a strong cultural heritage of motorbike rides. People over here ride bikes not only because they want to go from point A to point 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 license issued gives India an edge. I believe that in the times to come, higher capacity bikes' 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 Ducati in Asia.
