The last time the Hyosung 250cc Comet landed in India, in 2004, it sold like hot cakes. Eager customers flocked to Kinetic Motors outlets to buy the bike, available in limited numbers. At that time, Hyosung hardly faced any competition.
But, eight years can make a lot of difference. The Comet has returned — it was launched here a few months ago. This time around, the field is bristling with competition from some of the biggest names in motorcycling from around the world, and some fiercely competitive local ones as well. The Rs 1.57-lakh CBR 250R from Honda is the largest-selling bike in its class and undercuts the Hyosung Comet by almost Rs 1.33 lakh, which is a huge margin.
Despite the Rs 2.90-lakh (ex-showroom, Mumbai) price tab for the 250cc Hyosung, around 350 bookings have been made for the Comet since its July-end launch, and its Pune-based assembler, DSK Motowheels, is confident of selling another 1,650 units by March-end.
Pricing the bike this high seems an almost bizarre tactic for a lesser-known company.
The problem is none of its bikes is manufactured here — something necessary for a company to be price- competitive. The Hyosung Comet and three other models (GT650, GT650N and ST7) are all assembled in India at a small facility in Wai, Maharashtra. As much as 80-90 per cent of the components for the Comet are sourced locally by DSK to keep the costs low, but that’s not sufficient for a significant price drop.
Made in India
However, moving forward, models up to 250cc may now be completely built in India, engines included, resulting in an almost 50 per cent reduction in their selling price. Components like batteries and tyres for bigger bikes will also be sourced locally.
“My target is to bring down the price of the GT250R (Comet) to Rs 1.5-1.6 lakh. It may not be a premium compared to the Honda CBR250 after two years,” says Shirish Kulkarni, director of DSK Motowheels.
However, the move towards full manufacturing in India will not be possible at Wai, due to limited land availability and tighter regulations. So, the company is pumping an additional Rs 300-400 crore into a new plant located close to Pune that can churn out 100,000 units annually, in the next 18 months.
“We are facing a lot of production constraints now and we have to make sure that we eliminate those first. We already have 250 pending bookings for the GT250. We can produce only 10 bikes per day at that plant,” adds Kulkarni.
Further, DSK will also launch its cruiser range next month with the introduction of the GV650 and follow it up with the launch of GV250 (Aquila) around March. Both products, though assembled in India, are expected to be priced upwards of Rs 2.5 lakh. The Aquila will be the country’s cheapest cruiser, priced far below the cheapest Harley Davidson motorcycle here.
After two failed marriages in India, this is the third beginning for S&T Motors, Korea — the parent company of Hyosung. Its first venture, with Kinetic, was hobbled by the fact that customers had to wait for spares to arrive all the way from Korea and received no servicing option here. Kinetic eventually sold its business assets to Mahindra & Mahindra.
The Garwares, its second partner, were looking for increased sales, and, when that didn’t happen, they sold their two-wheeler business to Pune’s real estate giant, the DSK group, which was subsequently renamed DSK Motowheels.
This time around, Hyosung thinks it has the right strategy. Apart from the premium segment, it has also trained its sights on the big prize, the volume motorcycle segment — which includes bikes up to 150cc — as it constitutes over 90 per cent of total domestic volumes. These 125cc and 150cc models will be designed and developed in India and suited to local tastes and preferences.
Clearly, the strategy adopted in India by Hyosung is top-down, just like most other premium auto makers, such as Volkswagen, Skoda and Nissan. “We are looking at the 125-150cc to come in also by the end of 2014. The most important thing now is to have the brand established. Once that is done, there will be no looking back,” adds Kulkarni.
Though DSK, as a brand, is known within the boundaries of Maharashtra, both Hyosung and it suffer from a lack of brand exposure outside the state. Therefore, securing new dealerships and service centres could become a challenge in the short term. The company’s dealer strength now is 18 and it hopes to take that to 30 by March.
DSK owns Toyota’s largest dealership in the state, with a turnover exceeding Rs 500 crore. To promote the sales of Hyosung further, Kulkarni has kept his option of talking to his existing Toyota customers open but has declined to use the infrastructure of the car brand.
With Bajaj-KTM, Hero MotoCorp and Royal Enfield upping the ante on the premium segment, and Harley Davidson and Kawasaki dominating the heavyweight segment of motorcycles, Hyosung will need to pull out all the stops to make an impact here.