Suzuki Motorcycle India Private Limited (SMIPL) is looking at increasing motorcycle sales to account for half of its overall volumes over the next three years.
The move comes ahead of the Japanese two-wheeler major gearing up to foray into fast-growing mass commuter segment (motorcycles with engine capacity less than 125cc) with the launch of entry-level bike Hayate next month.
The company, at present, has limited presence in the motorcycle industry in India with GS150R (150 cc) and Slingshot (125 cc). Over 80 per cent of its volumes at 288,604 units came from scooters Access 125 and Swish 125 in the last financial year. Motorcycle sales stood at a modest 50,130 units.
SMIPL vice-president (sales & marketing) Atul Gupta said the company’s motorcycle sales contribute a fifth of its overall volume.
“With introduction of products across segments, we are expecting to increase the share of motorcycles to half of our overall volumes in the domestic market by 2015,” he added. “The Hayate is the first of the products in our line-up.”
The Hayate is scheduled for launch later next month, thus poised to take on best-sellers Hero Splendor, Bajaj Discover and TVS Star City. Post the launch, Suzuki is expecting to sell 10,000 units of Hayate every month, which would be double the units its best-seller Slingshot currently clocks in the same time span.
With sales of over seven million units, the commuter segment contributes as much as 70 per cent of overall motorcycle sales in the country. Hero alone accounts for three-fourths of sales in the category. Suzuki, which has products with engine capacity upwards of 125 cc, has less than one per cent share in the domestic motorcycle market. At Hero, more than 45 per cent of overall volumes come from semi-urban and rural markets.
To tap growth potential in the hinterland, Suzuki too has commenced work to double its distribution network to 500 touch points over the next two years. To meet the growing requirement, the company is increasing capacity by 50 per cent — to 540,000 units — by 2014. Additionally, Suzuki is looking at setting up a second unit (a total installed capacity of two million units) in Rohtak. Suzuki is to invest close to Rs 2,000 crore in that Haryana city.
Following close on the footsteps of rivals Hero MotoCorp and Honda Motorcycle and Scooter India Limited (HMSI), SMIPL is set to initiate a massive brand awareness campaign to up sales in the world’s second largest motorcycle market.
The company has signed actor Salman Khan as brand ambassador to increase the visibility in the country. Khan’s association with SMIPL will begin with the endorsement of Hayate 110cc. Gupta said brand loyalties remain strong even as the motorcycle market in India was growing. “We needed to break into the clutter by differentiating our products and marketing strategy,” he added. “We decided to sign on Salman Khan as he is a strong fit with the value-packed products we have scheduled for launch in the India market.”
While Gupta declined to specify the budget, Suzuki has earmarked for branding expenses in the current financial year, he said the company usually forks out resources equivalent to eight per cent of net sales on marketing initiatives.
Suzuki is the latest among two-wheeler companies to embark on a brand repositioning drive to consolidate its position in the country’s intensely competitive motorcycle market. The Munjals-promoted Hero Group had earlier last year spent close to Rs 175 crore on an image makeover exercise. That was after the termination of its joint venture with Honda Motor Corporation. Rival HMSI is now understood to have firmed up a Rs 100-crore project to establish its individual identity in the hinterland, which accounts for over 45 per cent of sales for its erstwhile partner Hero MotoCorp.
HMSI is in the process of finalising its first brand ambassador in the country. While actor Hrithik Roshan endorses Hero’s premium motorcycle Karizma, Mahindra Two Wheelers had roped in Aamir Khan, also from Bollywood. John Abraham campaigns for Yamaha.