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Now, people are looking for that perfect commuter partner, able to look between the two models which were recently upgraded, the Honda Dio and the Mahindra Duro DZ.

Dio with her black plastic is more appealing in see. It also has a better looking switchgear instrumentation, even if the more brittle is to operate. This sporty looking scooter also offers low set steering wheel and comfortable chair, making it easier for the rider to get on.

Meanwhile, the wheel is placed more higher for the Duro DZ model; Hence is the seat of the scooter upright.

A parable visible to the both models is the decent space under the seat for storing the full face helmet. Another similarity is the usability Panel.

At the same time, the Dio is powered using a 109cc air cooled single cylinder, 2 valve timing engine deliver maximum 8.0 bhp @ 7, 500rpm power and the biggest torque of 8.6 Nm @ 5500rpm. The Duro is equipped with a 2 valve single cylinder 124.6 cc engine churning out 8.0 bhp @ 7000rpm power at the most torque and maximum 9.0 Nm @ 5500rpm.

Honda, also supports a lighter and better throttle response. Other features, is the tubular chassis, the same as in Duro Dz underbone model. Recommended suspensions for the spring loaded hydraulic damper in front is the Dio, while in Duro is telescopic forks and swingarm swing arm to support for the back suspension in Honda. Swingarm with single coil is the back suspension damper for Mahindra.

Brakes to lock down the front and back tires of the Honda model is the 130 mm drums with CBS, while that for the Mahindra Duro is the 130 mm drums.

When it comes to the lust factor, first in features, such as the draft State Honda, character, treatment, wellness, image and more.

Mounted the engine for Mahindra is very restrictive. One aspect, which defines, Duro profits is ride comfort. It is also fast, even if Dio is more fuel efficient, making it the best ride for daily carry over. Other features that it supports include the seating comfort and usability, the same as that of Duro, or even better.

The over-the-road price for Honda Dio to 33.300 rupees for Honda Dio Delhi is that this for Mahindra Duro Dz rupees 47,900 expectation.

To come to a conclusion, we can say that Honda in desirability, quality, usability, rider comfort and such leads, even if Mahindra provides better acceleration, ride-ability, brake feel, braking efficiency, treatment, etc.

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Honda introduces its latest updated DioMitsubishi introduces its updated Montero

Here is exactly why they are planning an assault on the Indian scooter marketBy:Sharmistha Mukherjee |Published :June 07, 2011

The Indian two-wheeler market comprises about 12 million units per annum, of which over 75 per cent is constituted by motorcycles. So why is India Yamaha Motor revving up to enter the scooter market in India?

Point to note, Yamaha is not the only one. Two-wheeler market leader Honda Motorcycle and Scooter India (HMSI) is also firming up plans to launch a new product in the category this fiscal.

So what gives?

Simply put, strong double-digit growth. While scooters, at present, account for about 18 per cent of the sales in the overall two-wheeler market in India, the segment has posted strong growth numbers with sales increasing by around 41.79 per cent last fiscal to log 2.07 million units. Many contend rising petrol prices were the beginning of the Indian scooter surge. Whatever the reason — nostalgia or sheer prudence — this sudden growth has prompted new players to look for opportunities in the category. So there is India Yamaha Motor which is gearing up to foray into the segment with an all-new product that parent Yamaha Motor Corporation is developing specifically for the country.

As things stand, the top four two-wheeler makers — Hero Honda, Bajaj Auto, TVS and HMSI — together account for around 93.5 per cent of the sales in the domestic market leaving five-odd players — Suzuki Motorcycle, India Yamaha Motor, LML, Mahindra Two Wheelers and Royal Enfield — to battle out the remaining 6.5 per cent. Technically speaking Yamaha today is the sixth largest two-wheeler maker in India. The company has a marginal share of 2.35 per cent in the domestic market.

HMSI, which has three scooter brands — Activa, Dio and Aviator priced between Rs 39,820 and Rs 50,020 — is the largest maker of two-wheelers accounting for 43 per cent share in the domestic market. HMSI sold 893,335 scooters last fiscal.

On its part, India Yamaha Motor is looking to invest $10 million by 2012 in capacity expansion as well as in new products, revving up its market share to about 10 per cent from the current 2 per cent. Roy Kurian, national business head, India Yamaha Motor, says, “We were studying the Indian market intensively over the last two years to gauge the requirements of customers here. We decided we needed a new product. The product is in development at our R&D centre in Japan, which would be introduced in the country shortly.” Kurian, however, declined to specify a definite timeline and technical specifications of the scooter.

India-specific
Yamaha has scooters such as the Neo, Fino, and Spark in its global portfolio which it sells mostly in South East Asian countries. Kurian explains, “Unlike in the 1970-80s, over 60 per cent of scooter users today are women. The riding conditions here and the very profile of the target group necessitated that we develop a product specifically for the Indian market.” Industry sources say it is likely to be a gearless scooter and will contend with best sellers such as Honda Activa and Hero Honda Pleasure.

But it won’t hit Indian roads before the end of next year. The company is conducting post product development studies to evaluate strategies to enter the new category and the positioning of the product. Yamaha would focus on selling scooters in the southern and western markets of India where per capita income is comparatively higher. “The four states in the south, as well as Gujarat and Maharashtra are good markets. This has a direct co-relation to education and awareness levels in these places. A lot more women are working (outside the home) in these places. Delhi too has a lot of potential,” Kurian says.

Yamaha is looking to sell 500,000 motorcycles (domestic sales and exports) this financial year, an increase of over 31.6 per cent over the 380,000 units sold in 2010-11. The company has 400 dealer outlets across the country. Over the next three to four years, Yamaha hopes to cross over to double digit share figures with new products and improved distribution. Kurian says, “We want to consolidate our position in India. This year, we expect to grow by at least a third and then on double the growth rates recorded by the overall two-wheeler industry.”

In Vietnam, Thailand and Indonesia, Yamaha has 20 per cent market share. In Indonesia, it sold 3.5 million motorcycles last year, compared to 0.35 million units it expects to sell in the Indian market this year. “The potential to grow is huge”, adds Kurian.

Yamaha, which prides itself on the technology its products offer, has adopted a top down approach for boosting sales in the Indian market. “Our products are known for their technology. And we will continue to introduce top-end products in India. We want to reach out first to the educated urban buyer who is aware of what we stand for. Once we succeed in establishing our brand firmly in urban markets, sales would automatically filter in from rural areas. The rural buyer wants a proven brand.”

THE MOTORCYCLE MAJORS
Market share for sales in domestic 
market (2010-11)

Honda Motorcycle and 
Scooter India

Strengthening portfolio

Besides foraying into scooters Yamaha is also looking to rev up its motorcycle portfolio. The company is looking at introducing two new motorbikes every year, including upgrades. Also on cards is an electric scooter. “We have electric scooters. We will examine how the market for such products develops in India. If there is demand, we can come out with a product.”

Industry experts, however, raise concern over Yamaha’s weak presence in the 100-110 cc mass commuter segment that contributes as much as 60 per cent to overall motorcycle sales in the country. Yamaha has two products — YBR110 and Crux — in the 100-110 cc segment but sales are significantly lower than those of Hero Honda Splendor which sells over two million units annually.

Kurian says, “It is not that we are ignoring the mass commuter segment: we do have products in the 100-110 cc category. But the 150-cc segment is a growing market. Now we are seeing demand for 150 cc bikes coming from even B and C category towns.” India Yamaha Motor today has 15 models in its portfolio, with as many as six positioned in the 150 cc segment. The FZ series is Yamaha’s largest selling brand in the country with sales amounting to around 20,000 units per month. The company had 14 per cent share in the category last month and is expecting to capture a fifth of sales in the segment by the end of the current fiscal.

The 10 per cent share Yamaha is eyeing in the Indian market calls for fresh investment in creating additional capacity. Last year, as many as 11.8 million two-wheelers were sold in the country. The market is expected to grow at 12-14 per cent this financial year. Even at the current sales numbers, Yamaha would have to sell over a million units to gain a market share of 10 per cent in the two-wheeler industry.

To this effect, India Yamaha Motor is planning to set up a third facility in the country. Kurian confirms, “We are serious about our targets and would have to look at fresh capacity to achieve them.” The company declined to share details of the capacity it is targeting and the investment Yamaha proposes to make to that end, but indicated that that the company will begin the search for a new location to set up the new plant soon.

The two other facilities that India Yamaha Motor has today are both located in the national capital region — one in Surajpur in Greater Noida and the other at Faridabad. The Surajpur plant can roll out 600,000 motorcycles a year, and can be expanded to one million units. The Faridabad facility can manufacture 700,000 engines, besides other components.

Last year, the company had said it would focus more on the Indian market with more investments and better products. Its scooter foray may well be a sign of things to come.

Hero and Honda both planning to launch more scootersBy:Sharmistha Mukherjee |Published :July 05, 2011

While Hero Honda is ramping up capacity by 50 per cent, HMSI is readying itself to launch a fourth product.

The competition in the motorcycle segment is about to spill over to the scooters’ market with Hero Honda Motor Limited (HHML) and Honda Motorcycle and Scooter India (HMSI) chalking out plans to corner a larger chunk of the pie in the fast-growing category.

While Hero Honda (soon to be renamed Hero MotorCorp) is ramping up capacity by over 50 per cent to manufacture half a million scooters in this fiscal, HMSI is readying itself to launch a fourth product after the existing Activa, Dio and Aviator. Hero Honda has only one product in the segment — Pleasure. The capacity expansion programme will enable the Munjals-controlled Hero group to close the gap with market leader HMSI.

HMSI, which sold 893,335 scooters in the country last fiscal, has a market share of 43 per cent. HHML with sales of 342,991 units in 2010-11 comes a distant third with market share of 16.5 per cent.

Anil Dua, senior vice-president (sales & marketing, Hero Honda Motor Limited (HHML) said: “Our scooter sales have outgrown that of the overall two-wheeler category last year. Sales of Pleasure have shot up 70 per cent over the previous year. We are now increasing capacity to roll out 2,300 scooters a day from the earlier 1,500 units.” HHML sells around 35,000 units of Pleasure every month

The company, however, does not have plans to introduce a second scooter model in the immediate future. “Five years back scooters accounted for 10 per share in the overall two-wheeler market in India, last year the share went up to 18 per cent. We have plans to go a long way in the segment with the ‘Pleasure’.”

The sales growth in the scooters’ segment has been evincing interest from two-wheeler makers. While TVS Motors is conducting feasibility studies to introduce electric scooters in India, Yamaha Motor Corporation is developing a new product in Japan specifically for the Indian market. In 2010-11 scooter sales increased by 41.79 per cent to 2.07 million units in the domestic market.

“An increasing number of college-going and working women are opting for gearless scooters for personal transport. With petrol prices on a rise this category is expected to grow rapidly. Two-wheeler makers are showing a renewed interest in the segment,” said Abdul Majeed, leader, automotive practice, Price WaterHouseCoopers (PWC).

Hero Honda is the single largest two-wheeler manufacturer in India accounting for one out of every two motorcycles sold in the country. Post the termination of the joint venture Hero Honda between the Munjals and Honda Motor Corporation in December last year, HMSI has been investing to scale up motorcycle sales in India — an area where former partner HHML has a stronghold.

The company recently announced an investment of Rs 1,400 crore to double capacity to 1.2 million units at its second plant in Tapukara, Rajasthan, and to set up a third plant in Karnataka this fiscal. Besides, the company plans to introduce core products in the mass commuter segment (100-110 cc) to challenge HHML’s dominance.

Honda to launch upgraded scooters in the 100-125cc segmentBy:Swaraj Baggonkar |Published :March 25, 2011

Honda Motorcycle and Scooter India (HMSI), the leader in the automatic scooter segment, is preparing to launch a bigger capacity scooter.

Honda, the maker of Activa, India's largest selling gearless scooter, will tap the customer base which seeks upgraded versions of the available 100-125cc engines.

Shinji Aoyama, President and CEO, HMSI, said, “We will introduce a bigger displacement scooter in the coming period. There is a need for a more powerful product in that segment”.

The company currently sells the Activa (110cc), Aviator (110cc) and Dio (102cc) in the scooter segment and five motorcycles — Twister, Shine, Stunner, Unicorn and Dazzler. Scooters will contribute nearly 55 per cent to the company's sales this year, which is expected to stand at 1.65 million units.

Although power scooters are popular in some overseas developed markets, manufacturers have been conservative in introducing them in India due to their higher price tags. Pune-based Kinetic Motor Company, once the market leader in the scooter segment, had launched a 165cc engine power scooter, Italiano Blaze, for nearly Rs 50,000. The demand for the Blaze was high due to its superior performance, but Kinetic wasn’t able to provide the service and back-up parts. Kinetic eventually decided to wrap up its business and sold its assets to Mumbai-based conglomerate Mahindra & Mahindra for Rs 110 crore in 2008.

Although there was no clear indication on what the new scooter from HMSI will be, market experts believe it would have an engine of around 130-150cc. The move towards a bigger engine is also triggered by the buoyant demand seen for the Suzuki Access 125. While a small capacity scooter of around 100cc carries a price tag of Rs 41,000, a bigger engine scooter by HMSI will ideally be priced at Rs 50,000-55,000, say market analysts.

The India scooter market has seen scorching growth so far this financial year, with sales of 1.88 million units, an increase of 44 per cent in the domestic market. HMSI currently has a market share of 43 per cent in the scooter segment with annual sales of 813,000 units.

Currently carrying out test runs of about 50 electric scooters across IndiaBy:Press Trust of India |Published :March 11, 2011

Chennai-based two-wheeler maker TVS Motor Company today said it will re-enter the Indian electric scooter market with some existing and new models in the next fiscal.

The company is currently carrying out test runs of about 50 electric scooters across various towns in the country.

"We are working on introducing electric scooters and these are being experimented for the launch. By some time next fiscal, it will come (to the market)," TVS Motor Company President (Marketing) H S Goindi told reporters here.

About 50 electric scooters, comprising some of its existing and new models, are being tested across the country, he added.

"We will launch only scooters in electric mode. The products will initially run on lead acid batteries and later we may develop some other technology also," Goindi said.

The company will produce these new products at its Mysore facility, he said.

When asked about the electric two-wheeler market, Goindi said: "Business in India picked up few years back and also dropped because of variety of issues. Now, subsidy has also been offered, but still it is very sketchy. We feel, business will again pick up."

Earlier, TVS had launched electric scooterette 'Scooty Teenz Electric' in April 2008 with high hopes of selling around 40,000 units per year. However, it stopped the production in May 2009 as it received a lukewarm response from the market.

The company had also shelved its plans to launch electric three-wheelers. "We have an electric three-wheeler, which we had planned to introduce but there is no market for such products. So we don't have any plans to launch it now," Goindi had said in June 2010.

The Budget for 2011-12 proposed to set up a National Mission for Hybrid and Electric Vehicles to encourage manufacturing and selling of alternative fuel-based vehicles.

It also proposed to cut excise duty on development and manufacturing of hybrid vehicle kits to 5% from the existing 10%, besides fully exempting customs and counter-vailing duty on import of special hybrid parts.

In November last year, the government had announced a Rs 95 crore incentive package for the electric vehicle makers for the remaining part of the 11th plan.

Honda to launch upgraded scooters in the 100-125cc segmentBy:Swaraj Baggonkar |Published :March 25, 2011 

Honda Motorcycle and Scooter India (HMSI), the leader in the automatic scooter segment, is preparing to launch a bigger capacity scooter.

Honda, the maker of Activa, India's largest selling gearless scooter, will tap the customer base which seeks upgraded versions of the available 100-125cc engines.

Shinji Aoyama, President and CEO, HMSI, said, “We will introduce a bigger displacement scooter in the coming period. There is a need for a more powerful product in that segment”.

The company currently sells the Activa (110cc), Aviator (110cc) and Dio (102cc) in the scooter segment and five motorcycles — Twister, Shine, Stunner, Unicorn and Dazzler. Scooters will contribute nearly 55 per cent to the company's sales this year, which is expected to stand at 1.65 million units.

Although power scooters are popular in some overseas developed markets, manufacturers have been conservative in introducing them in India due to their higher price tags. Pune-based Kinetic Motor Company, once the market leader in the scooter segment, had launched a 165cc engine power scooter, Italiano Blaze, for nearly Rs 50,000. The demand for the Blaze was high due to its superior performance, but Kinetic wasn’t able to provide the service and back-up parts. Kinetic eventually decided to wrap up its business and sold its assets to Mumbai-based conglomerate Mahindra & Mahindra for Rs 110 crore in 2008.

Although there was no clear indication on what the new scooter from HMSI will be, market experts believe it would have an engine of around 130-150cc. The move towards a bigger engine is also triggered by the buoyant demand seen for the Suzuki Access 125. While a small capacity scooter of around 100cc carries a price tag of Rs 41,000, a bigger engine scooter by HMSI will ideally be priced at Rs 50,000-55,000, say market analysts.

The India scooter market has seen scorching growth so far this financial year, with sales of 1.88 million units, an increase of 44 per cent in the domestic market. HMSI currently has a market share of 43 per cent in the scooter segment with annual sales of 813,000 units.

Currently carrying out test runs of about 50 electric scooters across IndiaBy:Press Trust of India |Published :March 11, 2011 

Chennai-based two-wheeler maker TVS Motor Company today said it will re-enter the Indian electric scooter market with some existing and new models in the next fiscal.

The company is currently carrying out test runs of about 50 electric scooters across various towns in the country.

"We are working on introducing electric scooters and these are being experimented for the launch. By some time next fiscal, it will come (to the market)," TVS Motor Company President (Marketing) H S Goindi told reporters here.

About 50 electric scooters, comprising some of its existing and new models, are being tested across the country, he added.

"We will launch only scooters in electric mode. The products will initially run on lead acid batteries and later we may develop some other technology also," Goindi said.

The company will produce these new products at its Mysore facility, he said.

When asked about the electric two-wheeler market, Goindi said: "Business in India picked up few years back and also dropped because of variety of issues. Now, subsidy has also been offered, but still it is very sketchy. We feel, business will again pick up."

Earlier, TVS had launched electric scooterette 'Scooty Teenz Electric' in April 2008 with high hopes of selling around 40,000 units per year. However, it stopped the production in May 2009 as it received a lukewarm response from the market.

The company had also shelved its plans to launch electric three-wheelers. "We have an electric three-wheeler, which we had planned to introduce but there is no market for such products. So we don't have any plans to launch it now," Goindi had said in June 2010.

The Budget for 2011-12 proposed to set up a National Mission for Hybrid and Electric Vehicles to encourage manufacturing and selling of alternative fuel-based vehicles.

It also proposed to cut excise duty on development and manufacturing of hybrid vehicle kits to 5% from the existing 10%, besides fully exempting customs and counter-vailing duty on import of special hybrid parts.

In November last year, the government had announced a Rs 95 crore incentive package for the electric vehicle makers for the remaining part of the 11th plan.

HMSI today said it will continue to introduce more gearless scooters in the domestic marketBy:Press Trust of India |Published :March 22, 2011  Two-wheeler maker Honda Motorcycle & Scooter India (HMSI) today said it will continue to introduce more gearless scooters in the domestic market, as it sees a higher growth in this segment.

"We are the market leader in gearless scooters. With demand for gearless scooters to grow in the domestic market, we are upbeat on this segment. Going forward, HMSI sees 40% business from scooters and 60% from motorcycles," HMSI President and CEO Shinji Aoyama told reporters here.

"Demand for gearless scooters will be more in Tier-II and Tier-III cities. We will continue to manufacture more scooters to meet demand in the domestic market," he said.

The company plans to ramp-up its dealership network to tap the rural market.

"Currently, we have around 1,200 dealerships and we plan to add 100 more by FY12," he said.

Aoyama, who will leave the Indian firm after serving for four years to join the parent Honda Motor Company from April 1, said HMSI aims to be numero uno in India in the next decade.

"We are very happy for the support from the people (in India). We need the same support to be No.1 in the next decade in India," he said, adding, "the recent calamity in Japan has not affected our two-wheeler industry much."

The company aims to sell 21 lakh units in 2011-12, as against 16.5 lakh units in 2010-11. It also aims to export 1 lakh units in 2011 and 1.7 lakh in 2012.

"Our products are more in demand in the domestic market. Currently, we have 2.6 lakh waiting customers and plan to increase the capacity to meet market demand," he said.

HMSI plans to start production of its second facility at Tapukara in Rajasthan in July this year. Its initial annual capacity will be 6 lakh units and later it will be expanded to 12 lakh units per annum.

"We will soon expand the capacity to 12 lakh units per year to meet the demand. We have invested around Rs 1,000 crore in the facility," he said.

The company today introduced its global road-sport motorcycle -- CBR 250R, priced at Rs 1.51 lakh (ex-showroom in Mumbai), which will be available in the market next month.

"CBR 250R will be available by April-end at our 400 exclusive dealerships pan-India. We plan to sell 30,000 units in the first year," Aoyama said.

Believes HMSI runs the risk of being labelled just a scooter makerBy:BS Reporter |Published :April 01, 2011 

Rajiv Bajaj is an aggressive mood and thinks Honda Motorcycle and Scooter India (HMSI), the country’s fourth biggest two-wheeler maker, faces the risk of being labelled just a scooter maker in India.

Nearly 55 per cent of HMSI’s sales come from scooters even though the company has more motorcycles in its portfolio. The company has a market share of 43 per cent in the automatic scooter segment and sells three models under the category. But HMSI has seven motorcycle models, which account for 45 per cent of sales.

Bajaj says “there is a growing perception that Honda can make scooters only. Customers go to Honda for scooters and come to us for bikes. The perception is that Honda cannot make motorcycles and we should maintain that perception”.

Bajaj was explaining the expected increase in competition in the domestic two-wheeler market following the break-up of the 26 year old joint venture of Hero Honda. Honda now has more headroom for expansion as it is now free to enter the bike segment. That is where it will compete with Bajaj Auto.

Bajaj Auto moved away from scooters a little more than a year back after sales of its automatic scooter, Krystal, started to decline. The company has said it does not plan to re-enter that segment.

Bajaj saw sales rise by 38 per cent during the April-February period at 2,194,522 units as against 1,586,984 units reported in the same period a year back, according to SIAM data. HMSI on the other hand saw sales of 600,000 units of motorcycles during the same period, a growth of 53 per cent.

HMSI is unable to satisfy the burgeoning demand for Activa, its top selling automatic scooter. The present waiting period on the model is extending to nearly 10 months in some markets, according to sales representatives at dealerships.

Can Bajaj Auto stay away from scooters? Chairman Rahul Bajaj doesn’t think so.By:Kyle Pereira |Published :March 01, 2011 

Scooters: you either adore them or you abhor them. Either way, they are here to stay. But Bajaj Auto did not think so. In 2009-end, Managing Director Rajiv Bajaj announced that Bajaj was exiting the scooter business. In January 2010, they pulled the plug on the Kristal, their last offering in the segment.

In India, the scooter craze was given a shot in the arm more than two decades ago by the Kinetic Honda. Sales of geared scooters, mainly the Bajaj Chetak and the LML range, had dipped, then plateaued and then came the Kinetic Honda that started selling like hot cakes. It reigned supreme till the advent of another legend -- the Activa in 2001 -- which also happens to be a Honda, albeit with no connection to Kinetic.

What Honda saw was serious potential in the market and they put their ears to the ground. They realised that people still wanted the virtues of a scooter – ample space to load up the groceries and relatively good weather protection (when compared to a motorcycle) – but they also wanted added convenience. While the Honda Eterno’s sales hardly took off, the Activa’s numbers shot through the roof – proof that the new scooterist wanted the convenience of an automatic twist-and-go scoot and not the clutch/gear ritual of the older geared scooters.

Honda’s Activa has done so well that if you look into the second-hand market, it’s very difficult to come across a good specimen for sale. Even if you do sight one, most certainly it won’t be a steal. And if you decide to buy one brand new, there is a waiting period in excess of six months. Honda sold a total of 7,46,501 scooters in 2010-11 – 1,29,395 more units than the motorcycles they sold in the same year. Growth is a healthy 24 per cent over the last financial year.

N K Rattan, Operating Head - Sales and Marketing, Honda Motorcycles & Scooters India, says “We entered the market with scooters and it is the scooters that have driven our growth rapidly and brought us brand recognition. We have removed the dated image of scooters in the minds of people by updating them with technology and efficiency. Thus we have proved that scooters do not have to be lesser than motorcycles. We will continue catering to our scooter customers as we do to our motorcycle buyers. In fact, we will be launching a new scooter sometime this year.”

Here is exactly why they are planning an assault on the Indian scooter marketBy:Sharmistha Mukherjee |Published :June 07, 2011 

The Indian two-wheeler market comprises about 12 million units per annum, of which over 75 per cent is constituted by motorcycles. So why is India Yamaha Motor revving up to enter the scooter market in India?

Point to note, Yamaha is not the only one. Two-wheeler market leader Honda Motorcycle and Scooter India (HMSI) is also firming up plans to launch a new product in the category this fiscal.

So what gives?

Simply put, strong double-digit growth. While scooters, at present, account for about 18 per cent of the sales in the overall two-wheeler market in India, the segment has posted strong growth numbers with sales increasing by around 41.79 per cent last fiscal to log 2.07 million units. Many contend rising petrol prices were the beginning of the Indian scooter surge. Whatever the reason — nostalgia or sheer prudence — this sudden growth has prompted new players to look for opportunities in the category. So there is India Yamaha Motor which is gearing up to foray into the segment with an all-new product that parent Yamaha Motor Corporation is developing specifically for the country.

As things stand, the top four two-wheeler makers — Hero Honda, Bajaj Auto, TVS and HMSI — together account for around 93.5 per cent of the sales in the domestic market leaving five-odd players — Suzuki Motorcycle, India Yamaha Motor, LML, Mahindra Two Wheelers and Royal Enfield — to battle out the remaining 6.5 per cent. Technically speaking Yamaha today is the sixth largest two-wheeler maker in India. The company has a marginal share of 2.35 per cent in the domestic market.

HMSI, which has three scooter brands — Activa, Dio and Aviator priced between Rs 39,820 and Rs 50,020 — is the largest maker of two-wheelers accounting for 43 per cent share in the domestic market. HMSI sold 893,335 scooters last fiscal.

On its part, India Yamaha Motor is looking to invest $10 million by 2012 in capacity expansion as well as in new products, revving up its market share to about 10 per cent from the current 2 per cent. Roy Kurian, national business head, India Yamaha Motor, says, “We were studying the Indian market intensively over the last two years to gauge the requirements of customers here. We decided we needed a new product. The product is in development at our R&D centre in Japan, which would be introduced in the country shortly.” Kurian, however, declined to specify a definite timeline and technical specifications of the scooter.

India-specific
Yamaha has scooters such as the Neo, Fino, and Spark in its global portfolio which it sells mostly in South East Asian countries. Kurian explains, “Unlike in the 1970-80s, over 60 per cent of scooter users today are women. The riding conditions here and the very profile of the target group necessitated that we develop a product specifically for the Indian market.” Industry sources say it is likely to be a gearless scooter and will contend with best sellers such as Honda Activa and Hero Honda Pleasure.

But it won’t hit Indian roads before the end of next year. The company is conducting post product development studies to evaluate strategies to enter the new category and the positioning of the product. Yamaha would focus on selling scooters in the southern and western markets of India where per capita income is comparatively higher. “The four states in the south, as well as Gujarat and Maharashtra are good markets. This has a direct co-relation to education and awareness levels in these places. A lot more women are working (outside the home) in these places. Delhi too has a lot of potential,” Kurian says.

Yamaha is looking to sell 500,000 motorcycles (domestic sales and exports) this financial year, an increase of over 31.6 per cent over the 380,000 units sold in 2010-11. The company has 400 dealer outlets across the country. Over the next three to four years, Yamaha hopes to cross over to double digit share figures with new products and improved distribution. Kurian says, “We want to consolidate our position in India. This year, we expect to grow by at least a third and then on double the growth rates recorded by the overall two-wheeler industry.”

In Vietnam, Thailand and Indonesia, Yamaha has 20 per cent market share. In Indonesia, it sold 3.5 million motorcycles last year, compared to 0.35 million units it expects to sell in the Indian market this year. “The potential to grow is huge”, adds Kurian.

Yamaha, which prides itself on the technology its products offer, has adopted a top down approach for boosting sales in the Indian market. “Our products are known for their technology. And we will continue to introduce top-end products in India. We want to reach out first to the educated urban buyer who is aware of what we stand for. Once we succeed in establishing our brand firmly in urban markets, sales would automatically filter in from rural areas. The rural buyer wants a proven brand.”

THE MOTORCYCLE MAJORS
Market share for sales in domestic 
market (2010-11)

Honda Motorcycle and 
Scooter India

Strengthening portfolio

Besides foraying into scooters Yamaha is also looking to rev up its motorcycle portfolio. The company is looking at introducing two new motorbikes every year, including upgrades. Also on cards is an electric scooter. “We have electric scooters. We will examine how the market for such products develops in India. If there is demand, we can come out with a product.”

Industry experts, however, raise concern over Yamaha’s weak presence in the 100-110 cc mass commuter segment that contributes as much as 60 per cent to overall motorcycle sales in the country. Yamaha has two products — YBR110 and Crux — in the 100-110 cc segment but sales are significantly lower than those of Hero Honda Splendor which sells over two million units annually.

Kurian says, “It is not that we are ignoring the mass commuter segment: we do have products in the 100-110 cc category. But the 150-cc segment is a growing market. Now we are seeing demand for 150 cc bikes coming from even B and C category towns.” India Yamaha Motor today has 15 models in its portfolio, with as many as six positioned in the 150 cc segment. The FZ series is Yamaha’s largest selling brand in the country with sales amounting to around 20,000 units per month. The company had 14 per cent share in the category last month and is expecting to capture a fifth of sales in the segment by the end of the current fiscal.

The 10 per cent share Yamaha is eyeing in the Indian market calls for fresh investment in creating additional capacity. Last year, as many as 11.8 million two-wheelers were sold in the country. The market is expected to grow at 12-14 per cent this financial year. Even at the current sales numbers, Yamaha would have to sell over a million units to gain a market share of 10 per cent in the two-wheeler industry.

To this effect, India Yamaha Motor is planning to set up a third facility in the country. Kurian confirms, “We are serious about our targets and would have to look at fresh capacity to achieve them.” The company declined to share details of the capacity it is targeting and the investment Yamaha proposes to make to that end, but indicated that that the company will begin the search for a new location to set up the new plant soon.

The two other facilities that India Yamaha Motor has today are both located in the national capital region — one in Surajpur in Greater Noida and the other at Faridabad. The Surajpur plant can roll out 600,000 motorcycles a year, and can be expanded to one million units. The Faridabad facility can manufacture 700,000 engines, besides other components.

Last year, the company had said it would focus more on the Indian market with more investments and better products. Its scooter foray may well be a sign of things to come.

Home-grown auto makers Atul Auto and Mahindra & Mahindra are gearing up to explore the possibility of acquiring Scooters India, after the government today decided to divest its entire stake in the sick firm.

While Rajkot-based Atul Auto today said it is willing to acquire the 95 per cent stake in Scooters India  Ltd (SIL), Mahindra & Mahindra said it will examine the opportunity and will announce a final decision on  the acquisition of SIL within the next 45 days.

“We are interested in acquiring a minimum of 51 per cent stake in SIL. If the government permits, we can go  up to acquiring the entire 95 per cent stake of the firm,” Atul Auto Director Vijay Kedia told PTI. Asked about the valuation of SIL, Kedia declined to put any figure saying it will be possible only after  conducting a diligence.

Reiterating the company’s interest in SIL, he said: “We had earlier met the then Heavy Industries Minister Vilasrao Deshmukh and expressed our interest.

After Praful Patel took over, we again wrote a mail to them. But so far we have not got any reply as probably they were busy with this decision of disinvestment”.

He said if his company emerges as the acquirer, the acquisition will be funded through internal accruals and debt.

“At present we have a cash reserve of about Rs 25 crore. We have been already approached by many private equity firms,” Kedia said, adding, Atul Auto is expecting a revenue of Rs 190 crore for 2010-11 that will be declared in the next few weeks.

“We intend to invest in Scooters India’s technology and expand capacity. We have similar products,” Kedia said, adding, Atul Auto is the best candidate for Scooters India.

“Scooters India makes front-engine vehicles and we are are also into front-engine vehicles. So, we think it will be a a good combination,” he said.

Meanwhile, M&M said it will evaluate the possibilities of acquiring a stake in SIL.

“We will examine the opportunity and decide whether to approach the government. We will look to give any update in about 45 days,” a M&M spokesperson said.

The official, however, declined to share any further detail on this issue. Another three-wheeler maker Piaggio, which was earlier said to have been interested for a pie in SIL, said it is staying away from acquiring the troubled company.

“It (SIL) never appealed to us. We have our own facility at Baramati and are concentrating on it,” Piaggio Vehicles Chairman and Managing Director Ravi Chopra said.

Earlier in the day, the government, which holds 95.38 per cent in SIL as on December 31 last year, announced its decision to divest the entire stake in the firm with an aim to revive the company that has been incurring losses since 2002-03.

The selling of stake will be done through the Department of Disinvestment. The government will seek approval of the Parliament to get the authority to identify and induct a strategic partner.

Besides, the cabinet also gave approval for continued extension of salary support and clearing of balance sheet.

In March, 2009 the company was declared sick and went to the Board for Reconstruction of Public Sector Enterprises (BRPSE). As on 2009-10 it had a net loss of Rs 22.03 crore.

Incorporated in 1972, SIL started commercial production of scooters under the brand name of Vijai Super for domestic market and Lambretta for overseas market.

Later it ventured into three-wheelers with the Vikram brand. However, in 1997 it stopped two-wheeler production and has been into manufacturing and marketing of three-wheelers.

Thanks to Economic Times.

Regards,
M.Naren.
Author – BikeAdvice.in

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The government today said it will sell its entire 95 per cent stake in the loss-making auto firm Scooters India Ltd, maker of the iconic Lambretta scooters.

The disinvestment proposal was approved at a cabinet meeting chaired by Prime Minister Manmohan Singh. At 2:30 pm, shares of Scooters India were up 4.92 per cent at Rs 38.40 on the Bombay Stock Exchange (BSE). ”Union Cabinet decided to revive SIL. It is being proposed to revive the company through induction of strategic partner by off loading the entire government equity of around 95 per cent,” Information and Broadcasting Minister Ambika Soni told reporters after the meeting.

The balance 5 per cent equity will remain with banks, financial institutions, corporate bodies and others. She said the selling of stake will be done through the Department of Disinvestment. The government will seek approval of Parliament to get the authority to identify and induct a strategic partner. Besides, the cabinet also gave approval for continued extension of salary support and clearing of balance sheet.

“The intention is to transfer the entire government equity to a suitable identified strategic partner through the department of disinvestment,” Soni said. SIL has been suffering losses since 2002-03 and by 2008 -09 its entire networth was eroded, she added.

In March 2009 the company was declared sick and went to the Board for Reconstruction of Public Sector Enterprises (BRPSE). As on 2009-10 it had a net loss of Rs 22.03 crore. The firm’s “inherent inefficiencies”, “low productivity” and old plant technologies and ageing workforce didn’t help the matter either, she said, adding SIL was unable to meet even salaries and other statutory dues.

Incorporated in 1972, SIL started commercial production of scooters under the brand name of Vijai Super for domestic market and Lambretta for overseas market. Later it ventured into three-wheelers with the Vikram brand. However, in 1997 the firm stopped two-wheeler production and has been into manufacturing and marketing of 3 -wheelers only.

Regards,
M.Naren.
Author – BikeAdvice.in

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