520

Con sume r Behaviour and Branding

The case has been w ritten from secondary data available in public domain and its academic interpretation by the authors. The survey was sponsored by Indian Institute of Management, Bangalore, India. The case does not illustrate right or wrong handling with regard to any brand . It is purely written for academic purposes. The incorporated survey do!,s not have a fo cus towards any brand's strategies.

Motorcycle Ind ustry: An Overview

The Indian motorcycle ind ustry has been gaining momentum in the last two decades. Changing lifestyles, commuting to work, fun and leisure and the

Table 1 Two:whee lers: Sales t re nd

Year
9~00

No Of Units
3,468 ,99 1 3,574,356 4,306 ,057 5,054, 142 5,629,663 6 ,575,584

00--0 1 0 1-02 0 2- 03 03-04

04-05

Table 2 Two-whe ele rs: Bran d-wise volu me sales (nos)

Hero Honda

1999-2000 2000-'01 2001-'02 2002-'03 2003-'04 2004-'05

761 ,700 97 1,394 780,366 1,029 ,591 1,42 5,3 0 2 1,677, 562 1,25 1,85S 1,119,309 167,033 2,072 ,903 1,288 ,9 10 1, 146,696 341,450 2, 621 ,400

Bajaj Auto TVS Moto r

888,728 1, 198 ,227 863 ,442 865,68 1 5S ,S90

1,602,565
1, 16 7,515 55 1,84 7

Honda
Motorcycl e &

Scooters

Yamaha
M Oto rs

251 ,937 120,232 162 ,507 25,504 3,468,99 1

171 ,307 127 ,663 152,465 21 ,928

231,387 126,687 123,729 24 ,623

302,718 133,5 19 101,039 28, 294 5,054, 142

26 4, 673 126 ,435 81,594 28,3 61 5,6 29 ,663

252,196 10 7,814 73, 536 29 ,576 6,575,5 8:'

Kinetic Motor Ki netic Enginee ring

Royal En fie ld
Motors

Tota l

3 ,574 ,356 4 ,3 06,0 5 7

Source: SIAM

Fiery Th rills or Windy Rides

521

em ergence of upwardly mobile youngsters who like to associate themselves with motorcycle brands to reflect their lifestyles in urban markets are some of the reasons for the increasing demand for this ty pe of two wheelers' The rural market too, has a traditional orientation towa rds two wheelers not only as a mode of personal transport but also as a mode of transport for a small family. Besides, it also serves as a means to transport goods for the small vendor a nd shows promising signs of growth potentiaL Going by the behaviour of rural consumers in severa l conspicuous categories, the yo ungsters in these markets are likely to have their counterparts in urban markets as role models in the two-wheeler ca tegory. The expected rise in household income, easy availability of consumer finance, growing replacement demand, frequent introduction of newer trendy models by players ana the growing aggressiveness by key players are the factors aiding the growth of the two-wheeler market. This will drive the overall two-wheeler sales g rowth by around 12.7 per cent to 11 .9 million units by 2009- '10. Tables 1-7-provid e an overvi.;w-about the various aspects of the motorcycl e market in India.

Crowth of Motorcycle segments in the Indian context

Motorcycle production started in 1952with Royal Enfield as the only producer till the early sixties, with the production of 2,500 units per annum . The growth in production increased to 39,000 between 1963 and 1971 with Ideal Java and Escorts entering the field. 1972-'79 was a p eriod of slow down for motorcycle segment due to lower fuel efficiency and lack of design improvement. 1980-'86 was a period of foreign collaboration and broad banding of capacity, as a result of which the d emand grew by 47 per cent by 1987, b ut the momentum could not be su stained after 1989, when the prices of all the motor cycles were hiked and there was an economic slowdown. The p eriod between 1994--2002 saw the consumer preference shifted towards motorcycles in the whole of two wheeler markets . After registering a remarkable growth of 15.1 per cent (CAGR) between 2000-'01 and 2004--'05 (see Figure 1.1), the m otorcycle segment is expected to expand a t Table 3 .. Motorcycle dem an d forecas t (20 09- 20 10)
Motorcycle
Urban
Rural

2003-'04
1,787,0 14 2,383 ,432 4, 170,446

2004-'05
1,985 ,777 2,978,665 4,964,442

2009-' 10 (P)
2,951 ,645 6,526,354 9,478,000

CAGR (%)
8.2 1 7.0 13.8

Total

Source: CRI SINFAC

'I< Manohar Laza ru s, "To cut clu tter, personify How these brand s did it", The Hin du Busines sline , 14 5ep t. ,2006