With massive motorcycle makers such as Hero MotoCorp, Honda Motorcycle and Bajaj staring at a pie in the 300cc and above segment, India’s premium middleweight motorcycle segment is likely to witness intense competition in the next two. years.
As volume growth in the commuter motorcycle category is expected to slow in the coming years, most of these manufacturers plan to move up the value chain to improve profitability and penetrate deeper into the urban market.
Market leader Royal Enfield has been dominating the premium segment for the past decade and has been successful in its endeavor to post an operating margin of over 30% through fiscal 2018, indicating the high margins that the company has in its products. With a 97% market share at the end of fiscal 2020, the company led by Siddhartha Lal dominates this segment.
Honda Motorcycle and Scooter India (HMSI), the country’s second-largest two-wheeler manufacturer, announced on Wednesday its entry into the middleweight motorcycle segment (300cc and above) with the launch of the Highness CB 350. The latest The company’s offering will compete with market leader Royal Enfield’s Classic 350 and other products in the segment.
In 2019, Pune-based Bajaj Auto and Britain’s Triumph Motorcycles formed a joint venture with no equity capital to build 300-700cc motorcycles that are expected to hit the market in 2021.
Triumph seeks to leverage Bajaj Auto’s vast supply chain ecosystem and large-scale manufacturing of small bikes to lower cost of operations and bid prices.
Hero MotoCorp, the largest motorcycle manufacturer in the country, is also in the process of developing a range of mid-size motorcycles to expand its portfolio of premium motorcycles.
“The CB350 will have close to 90% local content and we plan to increase that further with more midsize bikes,” said YS Guleria, HMSI’s director of sales and marketing, alluding to Honda’s plan to launch more locally made motorcycles in the category. premium.
“Honda’s local research and development unit took the lead in developing this motorcycle and worked with global R&D based in Japan,” he added.
The new premium offering will also be the cornerstone of Honda’s premium motorcycle business in India and will be available at its BigWing premium dealers.
According to a senior industry executive, Honda and Bajaj Auto’s plan is to go after the midsize motorcycle market, which has the majority of customers opting for Royal Enfield 350cc models that cost less than ₹2 lakh. This segment is expected to expand in the next 2-3 years as the local development parts of Honda and Bajaj Auto are likely to have aggressive pricing for their respective offerings.
“Honda has evaluated the 350cc Royal Enfield models on key parameters including classic motorcycle appeal, upright seat position, engine displacement, and performance and exhaust notes,” he said, adding that the Honda’s new 350cc single-cylinder engine produces 20hp, which is very close to the performance of Royal Enfield’s 350cc engine.
According to data from Siam, motorcycles in the 251cc-500cc category peaked at 833,112 units in fiscal 2018. Volumes decreased to 658,924 units in fiscal 2020 as the economic slowdown hit sales in the whole country.
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