Mid-segment bikes start burning rubber

In April this year, the Indian two-wheeler industry witnessed what experts conservatively term as the 'mother of all deals'. Chennai-based TVS Motors announced a tie-up with BMW Motarrad, one of the motorcycle manufacturers revered by bike enthusiasts the world over.

The equity-free partnership aims to roll out premium, performance-oriented bikes from 2015. Both TVS and BMW have started work on products with engines less than 500cc.

BMW hopes to catapult itself to the top of the league in an under-penetrated market by dint of its technology, coupled with TVS' local consumer knowledge. Its aims to be a major player in what is called the mid-segment.

While the segment's pricing puts it determinedly in the premium bracket in India (most come priced above Rs 2 lakh), motorcycles with 250cc engines and above (till 800cc) are globally classified as mid-segment. The interest shown by the German giant is not singular. Nearly a dozen international and Indian companies are raring to launch motorcycles in this segment.

In addition to TVS and BMW, KTM, Husqvarna, Yamaha, Suzuki, Kawasaki, Hyosung, Bajaj Auto, Piaggio, Hero MotoCorp and Triumph are some working on mid-segment motorcycles, and for good reason. The Indian two-wheeler market is gradually maturing and starting to lean on premium bikes a bit more than economy models. Albeit, the bread-and-butter economy bike segment (75cc-125cc) commanded a share of 85 per cent in April-June, 2013. However, the volumes of the economy segment posted a fall of 2.5 per cent at 2.14 million units. In 2012-13, the domestic motorcycle market stood at 10.08 million units.

The scope for growth in mid-segment is betrayed by the action witnessed in the last six years. From just one player - the Chennai-based Royal Enfield, which commands a lion's share in leisure biking (95 per cent) - the premium segment has expanded to include three more.

Honda Motorcycle and Scooter India was among the first off the mark. The company launched the CBR 250R in 2011 and vroomed to over 10,000 units in the first year. Both Yamaha and Suzuki are believed to be interested in launching a 250cc bike in India. Kawasaki's Ninja range, which includes 300cc and 650cc versions, is marketed in India by Bajaj Auto.

Three weeks ago, the Austrian brand KTM, that specialises in off-roading and street motorcycles and in which Bajaj Auto holds a little under 50 per cent, launched the Duke 390 for Rs 18 lakh. The premium motorcycle, manufactured completely by Bajaj Auto, is the second offering after the Duke 200, launched two years ago.

Amit Nandi, vice president, Bajaj Probiking, says, "(The) response has been fantastic. In the first two weeks of the launch, we have had 1,000 bookings for the Duke 390."

Bajaj's own Pulsar will get a leg-up later in the year when it dons the new 375cc engine. The biggest engine in the Pulsar series has been a 220cc.

While Bajaj aims to ride to higher ground with a piggyback on the KTM, Korean bike brand Hyosung, along with its India partner DSK, has five products in the mid-segment between 250cc and 650cc. A long-awaited 250cc cruiser, GV 250 Aquila, will be launched by October. Shivapada Ray, chief operating officer, DSK Hyosung, says, "We are doing (sales of) 125-135 bikes every month. The GT250 alone clocks 80-90 units every month. We are preparing for the launch of the GV250 just before the festive period this year".

The craze for such premium two-wheelers is driven by the increased purchasing power of the young, say companies. While the 800cc-plus super bike category, priced Rs 6 lakh and above, remains out of bounds for a majority of buyers, the immediate need for power and class in a performance motorcycle is being satiated by these mid-segment bikes.

"There isn't too much impact (of the economic slowdown). This could be because the young professional class has the choice of buying a Rs 4-lakh car or a Rs 2-lakh bike. A lot also depends on what products are put out in the segment. We have witnessed a lot of walk-ins since the time we launched the Duke 390", adds Nandi.

When the entire motorcycle segment dipped by 4 per cent to 2.52 million in April-June, 2013, the mid-segment grew by a stomping 46 per cent to 40,852 units, according to data provided by the Society of Indian Automobile Manufacturers. The 250cc and above motorcycle market, though niche, offers great potential going ahead according to a report prepared by Care Research.

Meanwhile, imported super bikes, that have over 800cc engines, continue to thrive among their rarefied customer base. The leader remains Harley Davidson with its cruiser range. Other players include Ducati, Aprilia, Suzuki, Honda and Yamaha.