Honda plans to unveil scooters with stronger engines

Honda Motorcycle and Scooter India (HMSI), the leader in the automatic scooter segment, is preparing to launch a bigger capacity scooter.

Honda, the maker of Activa, India's largest selling gearless scooter, will tap the customer base which seeks upgraded versions of the available 100-125cc engines.

Shinji Aoyama, President and CEO, HMSI, said, "We will introduce a bigger displacement scooter in the coming period. There is a need for a more powerful product in that segment".

The company currently sells the Activa (110cc), Aviator (110cc) and Dio (102cc) in the scooter segment and five motorcycles � Twister, Shine, Stunner, Unicorn and Dazzler. Scooters will contribute nearly 55 per cent to the company's sales this year, which is expected to stand at 1.65 million units.

Although power scooters are popular in some overseas developed markets, manufacturers have been conservative in introducing them in India due to their higher price tags. Pune-based Kinetic Motor Company, once the market leader in the scooter segment, had launched a 165cc engine power scooter, Italiano Blaze, for nearly Rs 50,000. The demand for the Blaze was high due to its superior performance, but Kinetic wasn�t able to provide the service and back-up parts. Kinetic eventually decided to wrap up its business and sold its assets to Mumbai-based conglomerate Mahindra & Mahindra for Rs 110 crore in 2008.

Although there was no clear indication on what the new scooter from HMSI will be, market experts believe it would have an engine of around 130-150cc. The move towards a bigger engine is also triggered by the buoyant demand seen for the Suzuki Access 125. While a small capacity scooter of around 100cc carries a price tag of Rs 41,000, a bigger engine scooter by HMSI will ideally be priced at Rs 50,000-55,000, say market analysts.

The India scooter market has seen scorching growth so far this financial year, with sales of 1.88 million units, an increase of 44 per cent in the domestic market. HMSI currently has a market share of 43 per cent in the scooter segment with annual sales of 813,000 units.

Honda two wheelers to launch more auto-gear scooters

Honda Motorcycles and Scooters India (HMSI), country's market leader in auto-gear scooters, announces their plans for the coming years declaring more auto-gear scooters on their way.

"We are the market leader in gearless scooters. With demand for gearless scooters to grow in the domestic market, we are upbeat on this segment. Going forward, HMSI sees 40% business from scooters and 60% from motorcycles," said HMSI's President and CEO, Mr. Shinji Aoyama.

With good sales figures of 16.5 lakh units in last fiscal, HMSI is aiming to touch 21 lakh sales mark this fiscal and claiming the number one spot in the next decade. "We are very happy for the support from the people (in India). We need the same support to be number one in the next decade in India,"  said Mr. Aoyama adding "Our products are more in demand in the domestic market. Currently, we have 2.6-lakh waiting customers and plan to increase the capacity to meet market demand".

HMSI is also to expand their plant in Tapukara, Rajasthan to an initial capacity of 6 lakh units which is soon to be doubled. The company has invested Rs. 1000 crore on this new plant.

In the motorcycles department, Honda is launching next month the 250-cc version of its veteran  CBR called the Honda CB250R which is to be priced at Rs. 1.50 lakh.

Scooters India assemble on disinvestment reports

The heavy industries ministry has cleared outright sale of sick state-run companies Scooters India and HMT Bearings in a clear departure from its divestment policy that focused on sale of small stakes in profit-making firms.

The government holds 95% in Scooters India and 97% in HMT Bearings through HMT. The two companies together incurred losses of around 37 crore in the fiscal year ended April last.

Feeling of heat in “Japanese zone” in Jaipur

The industrial complex Majrakath at Neemrana, which has gained the name Japanese zone' because of a number of Japanese units coming up there, is in a state of uncertainty because of the crisis in tsunami-hit Japan.

The Rajasthan Industrial Development and Investment Corporation (RIICO) was successful in developing the Japanese zone in an expanse of 1166.63 acres. In all, 124 plots ranging from 4000 square metre to 40,000 square metre have been created and 20 plot allotments have already been made.

According to the MD of RIICO, Rajendra Bhanawat, nine projects have already begun trial production. These are for manufacturing of automobile brakes components and assemblies, PP compounds, cylinder liners, air conditioners & chillers and slide adjusters.

Now uncertainty looms large on the first such exclusive enclave in the country which has come up after RIICO reached an understanding with the Japan External Trade Organisation ( JETRO) to develop a zone on 1100 acres. Japanese investment worth $450 million have already come to Neemrana from Japan.

At RIICO's headquarters at Jaipur, no official was willing to talk about the impact on Neemrana's Japanese zone will have because of the crisis in Japan.

Japan is the sixth largest investor in India in terms of FDI with $22 billion invested in the last 10 years. Nearly 70% of this have come in the last three to four years. Of the portfolio flows that have come to India in recent times, Japan accounted for $8 billion. Out of which Neemrana received only $450 million. But the expectations were still high for future.

Analysts in Jaipur now expect that the Japanese economy will take longer than expected to come out of its current soft patch owing to the earthquake and tsunami. In a highly integrated world, it is impossible to escape aftershocks of a crisis like the one in Japan.

Last year, Honda Motorcycles and Scooters India Ltd (HMSIL) commenced construction of its two-wheeler manufacturing plant in Khushkhera industrial area. HMSIL planned to invest Rs 1100 crore in the unit employing 13,000 persons directly and indirectly and with the HMSIL coming to Khushkhera it was hoped that Tapukra, Neemrana and Khushkhera would become an automotive hub. But the uncertainty in Japan has put a question mark on the future. This company was to produce 12 lakh two wheelers annually.

The Honda group of companies is already setting up two green field projects in the Bhiwadi region. Honda Siel cars India Ltd (HSCIL) is setting up a car unit with an installed capacity of atleast 50,000 cars per annum.The project, which was to attract an investment of Rs 2000 crore, has now suffered a jolt because of the crisis in Japan. The company is currently manufacturing sheet metal parts, crank shaft and connecting rods with an investment of Rs 800 crore.

Nissin Brakes India Pvt Ltd, manaufacturing brake components and assemblies, Mitsui Prime Advanced Composites India Pvt Ltd manufacturing PP compounds, TPR Autoparts Manufacturing India Pvt Ltd manufacturing cylinder liners, Daikin Airconditioning India Ltd manufacturing air conditioners, Immasin India Pvt Ltd manufacturing slide adjusters, Toyoda Gosei India Pvt Ltd manufacturing auto components Daini Colour India Pvt Ltd manufacturing chemical compounds and Mikuni India Pvt Ltd manufacturing

auto components have already started production and three more companies were expected to start production soon.

"It is certain that such units that have invested considerably would continue to operate from the Japanese zone. But new investments in the next two years are unlikely because of the current situation in Japan," said an official of RIICO.

TVS Motors to return electric scooters market

TVS Motors on Friday said it was planning to re-enter the electric scooters market in the next financial year. The company has already developed an electric variant of Scooty Teenz, along with another new product for the domestic market.

H S Goindi, president (marketing), TVS Motors said, “We are testing 50 electric scooters in towns across the country. Depending on the feedback, the scooters will be launched sometime in the next financial year.”

The scooters would be rolled out from the company’s facility in Mysore and the company would initially use lead acid batteries for the electric scooters. “Business in electric scooters picked up in India a few years back, but dropped due to issues with battery technology and the withdrawal of subsidies. There is potential in the market, with the government announcing a national mission for promoting electric and hybrid vehicles. We see some proportion of sales coming from this segment over the next five years,” Goindi said.

In April 2008, TVS Motors had launched the ‘Scooty Teenz Electric’, for which the company targeted sales of around 40,000 units per year. However, it stopped production in May 2009, as the product received a lukewarm response.

Goindi said TVS Motors is studying the impact of the rise in commodity prices on the company’s margins and a decision on price rise is likely to be taken next month.

Meanwhile, the company on Friday launched its premium bike, ‘Apache RTR 180’, which boasts of anti-lock braking system technology and is priced at Rs 78,880 (ex-showroom, Delhi).

Yamaha in manufacture of scooter for India mkt in Japan

India Yamaha Motors India is gearing up to foray into the fast growing scooter segment in the country with an all-new product that parent Yamaha Motor Corporation (YMC) is developing specifically for the Indian market.

Roy Kurian, national business head, India Yamaha Motors, said, “We were studying the Indian market intensively over the last two years to gauge the requirements of customers here. We decided we needed a new product for the consumers here. A product is in development at our R&D centre in Japan, which would be introduced shortly.”

Industry sources indicate a gearless scooter from the Yamaha fold is likely to hit Indian roads by the end of next year.

Kurian, however, declined to specify a definite timeline and technical specifications of the scooter the company is considering for introduction in the Indian market.

Scooters, at present, account for nearly 18 per cent of sales in the overall two-wheeler market in India. The segment is posting strong growth numbers with sales increasing by around 47 per cent between April and January this financial year to 1.7 million units. An electric scooter may also be launched for India in due course.

Additionally, the company is also considering introducing two new motorbikes in India in the course of the year, which may include possible upgrades.

Kurian added, “We want to consolidate our position in the market here. We sold 2.5 lakh units in India last year. This year, we expect to grow by at least 50 per cent and then double the growth rates recorded by the overall two-wheeler industry in the country.”

India Yamaha Motors has sold 228,378 motorcycles in the domestic market till January this year, which is an increase of 21.28 per cent as compared to the corresponding period of the last financial year.

The motorcycle segment in the period has grown by 23.57 per cent to 9.7 million units.

Yamaha, which has 13 models in its portfolio in India, is targeting having 10 per cent share of the two-wheeler market over the next three to four years. The company’s current market share stands at 3.5 per cent. To this end, the company has launched six products in the 150 cc segment and is looking at attaining 20 per cent share in the category in the course of the year. “We are going to introduce top-end products in India and then work our way down the pyramid to lower segments. Our products are known for their technology and now we are seeing demand for 150 cc bikes even from the B and C category towns,” said Kurian.

The company which has two facilities at Surajpur in Uttar Pradesh and Faridabad, Haryana has a combined installed capacity to roll out six lakh units annually.

The capacity can be scaled up to manufacture nine lakh units per annum depending on demand. Yamaha sells products in India through its network of 400 dealers across the country.

Last year, the company had said it would focus more on the Indian market, with more investments, and aimed to have 10 per cent of its total global sales from the country within the next four years.

Bajaj Auto faces uneven ride in Indian car market

Abhijit is fiercely proud of his Kawasaki Bajaj motorbike and considers himself a company loyalist, but such attitudes could be a stumbling block for auto firms when it comes to promoting cars, analysts say .

"Motorbikes are the best for urban travel. They're economical and easy to park," the Mumbai sales executive in his 30s told AFP.

But while Abhijit, who uses only one name, wants to upgrade to four wheels, he is not yet sure whether he will stay true to the Bajaj brand, even though the company has announced that it is looking to get into the small car market.

"You know what you're getting with bikes and scooters," he explained. "A car from Bajaj? I'm not too sure."

Bajaj is India's second-largest manufacturer of two- and three-wheelers, and its name is synonymous with auto-rickshaws in the country, the world's largest market for such vehicles.

The Indian car market, where nearly two million new cars were sold last year, is increasingly crowded and cut-throat.

"Bajaj has the right DNA to make a car but not the experience," said Hormazd Sorabjee, editor of Autocar India magazine.

"It won't be easy. It will be a steep learning curve," he told AFP.

Bajaj Auto has tied up with French car giant Renault to produce, market and sell what it says will be a "pathbreaking", ultra low-cost, fuel-efficient minicar. The vehicle is slated to be launched next year.

The move makes strategic sense with small cars increasing their presence on India's roads ever since the launch of the Maruti 800 in 1983 -- the product of a partnership between Maruti Udyog and the Suzuki Motor Corp.

Nowadays, its successor the Maruti Suzuki Alto is the country's most popular small car, with Hyundai's Santro also a firm favourite among urban drivers.

Car penetration is low, with just 13 out of every 1,000 Indians owning one. But the market is the second-fastest-growing in the world, with sales forecast to rise by at least 25 percent in the current financial year, according to the Society of Indian Automobile Manufacturers trade body.

Two-wheelers remain India's favourite form of transport because of their low cost and easy maintenance, with motorbikes now accounting for 80 percent of the market, a turnaround from just a few years ago when cheaper, smaller scooters dominated.

Almost all of Bajaj's two-wheeler sales are now motorbikes, and Mahantesh Sabarad, an auto analyst at Mumbai-based Fortune Equity Brokers, said that the firm's focus on more powerful machines has paid off.

"The company has seen a rise in profits over the past decade even as scooter sales and market share dropped," he added.

But while the business, based in Pune, 170 kilometres (110 miles) southeast of Mumbai, has 50 years of manufacturing experience, a Bajaj car may be a harder sell.

Even Tata Motors -- one of India's leading vehicle makers -- has found the going tough.

It has tried to capitalise on the aspirational value of cars to Indians -- and their traditional eye for a bargain -- with the Nano, launched in mid-2009. Selling from just 100,000 rupees (2,500 dollars), the no-frills vehicle is the world's cheapest.

Nonetheless in November last year Tata said sales had slumped to just 509 units, forcing it to offer a string of after-sales perks to tempt new buyers. Sales have rallied but still just over 83,000 have been sold overall -- well below initial expectations.

Rajiv Bajaj has said his company's aim was to deliver a car with "mileage of 30 kilometres to a litre of fuel (71 miles to the gallon)". The company has refused to divulge any more details on the new car or its business strategy.

For his part, Sabarad said that whatever form the car takes, it will need to be a little more luxurious than the Nano.

"The Tata Nano experience shows that Indians do not necessarily like a bare-boned car. They like their car to be small but packaged with all the comforts of a full-sized one," he added.

Rajiv Bajaj says focus on bikes, No comeback in scooters

The country's second-largest two-wheeler maker Bajaj Auto today reiterated it will not make a comeback to the Indian scooter segment in immediate future as it aims a bigger share in the global motorcycle market.

"We are a motorcycle company and we will remain focused on motorcycles," Bajaj Auto Managing Director Rajiv Bajaj said at an All India Management Association conference here.

He was replying to a query on reports quoting the company Chairman Rahul Bajaj that Bajaj Auto may consider re-entering into the scooter market.

"The world market for motorcycles is of 35 million units and Bajaj will end this fiscal by selling only 3.5 million units. We have a market share of 10%, and so we have headroom for 90% growth," Bajaj said.

In the April-January period this fiscal, the company sold 19,89,377 bikes in the domestic market as against 14,11,259 units in the same period last year, up 40.96%.

Bajaj Auto's export during the period has also grown by 35.78% to 8,36,617 units as against 6,16,135 units in the same period a year ago.

When asked why the company stopped production of its scooters, Bajaj said: "We did not phase out, but people stopped buying scooters."

In December 2009, the company had announced that it would stop making scooters by end of 2009-10 fiscal, thus bringing down the curtains on 'Hamara Bajaj', which revolutionised the two-wheeler market in the country.

However, since the auto major stopped making scooters, the segment has witnessed a significant growth, led by gearless scooters from Honda Motorcycle & Scooter India, which is the market leader in the segment now.

In the April-January period this fiscal, the Indian scooter market has witnessed a growth of 46.57% at 16,97,204 units as against 11,57,902 units in the comparable period last fiscal, as per Society of Indian Automobile Manufacturers Association (SIAM) data.

The Pune-based two-wheeler maker on the other hand is focusing on motorcycles, offering a range of models such as Discover, Pulsar and has even increased stake in Austrian bike maker KTM Power Sports AG to nearly 38.09% as it looks to expand presence globally.

Bajaj Auto and KTM have been jointly developing products and the first of the co-developed products, KTM Duke 125, will hit European markets this year. The KTM models are supposed to be launched in India during the second half this year.