Flooding the Indian Motorcycle Market

BACKGROUND NOTE

However the scenario changed with the de-licensing of the sector in the 1980s. The number of manufacturers increased drastically and the focus shifted to branding and product features. Scooters dominated the two-wheeler market until 1990, accounting for an estimated 60% of the market. Bajaj Auto was the undisputed leader in the scooter market, followed by LML and Kinetic.

The healthy growth of the 1980s continued through to the 1990s, and the two-wheeler segment registered a growth of 14%. Till the 1980s, Enfield, Escorts and Ideal Jawa were the only major players in the motorcycle segment. From the mid 1980s, the segment gradually picked up momentum and its high growth potential forced all the major two-wheeler players to focus on the segment.

Almost all leading players entered into joint ventures and technical collaboration agreements with various foreign companies - mainly Japanese two-wheeler giants like Honda, Suzuki, Yamaha and Kawasaki Heavy Industries Ltd. (Refer Table I for Tie-ups).

TABLE I
INDIAN MOTORCYCLE INDUSTRY TIE-UPS

Collaborators		Year/Type of Tie-up	Year/Reasons for break-up
Indian	Foreign
TVS	Suzuki Motors, Japan.	1992, JV (TVS-Suzuki)	2001, Disputes over management control and technology.
Hero Honda	Honda, Japan	1984, JV (Hero Honda Motors Ltd.)	JV to end in 2004
Bajaj Auto	Kawasaki, Japan	Mid -1980s, Technical Collaboration	-
Escorts	Yamaha Motors, Japan	1995, JV (Escorts-Yamaha)	2001, Escorts'decision to diversify into agribusiness, IT, telecom, Internet and healthcare services.
Lohia Motors	Daelim Motors, S.Korea	Late 1990s, Tech. Collaboration	-

Source: ICMR

In 2000, the motorcycle market was characterized by the presence of sub-segments based on price - the premium segment (Rs 45,000 and above), the mid-segment (Rs 40,001-45,000) and the entry segment (upto Rs 40,000). Major players in the premium segment were Hero Honda, Enfield, Escorts Yamaha, TVS-Suzuki and Bajaj. In the mid-segment, the activity zone with high competition, Hero Honda was the market leader with a 35% share, followed by Bajaj and TVS Suzuki. In the entry segment, Bajaj Auto was the leading player followed by Hero Honda and Escorts and TVS-Suzuki (Refer Table II).