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Old 1st April 2015, 17:23   #1
GTO
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Default Survey: An insight on the Indian 2-Wheeler Market

Religare Capital Markets has concluded in its India Auto Urban Consumer Survey that two-wheelers have now emerged as the most preferred mode of transport for the lower income group.

The survey covered 1,500 respondents from Tier I & II cities across the country. It was conducted across age, income-groups and gender.

Some interesting findings:

Convenience and cost effectiveness vis--vis public transport (savings of around Rs. 400/month) is the key factor which is driving demand for two-wheelers in India.

Two-wheelers are viewed as a necessity, rather than a discretionary purchase.

Brand incumbency persists with Hero (motorcycles), Honda (scooters) and Maruti (cars) in the clear lead.

New buyer budgets upward of Rs. 55,000-plus for two-wheelers, indicating premium aspirations.

65% of survey respondents have cited the daily commute to work as the main reason for buying a two-wheeler. On the other hand, cars are popularly used for both, office commute and weekend travel.

Scooters continue to make a comeback.

55% of potential scooter buyers are first-time shoppers (compared to 26% for bikes), thereby implying strong growth prospects for the segment. In fact, the change in preference is already reflecting as scooter market share has risen from 15% in FY09 to 28% in FY15.

The segment of women has emerged as a key focus area for two-wheeler companies with 62% preferring the vehicle for their daily commute, and a whopping 65% of these favouring scooters.

In terms of brands, Honda reigns supreme with a thumbs-up from consumers across income strata, while Bajaj Auto is a clear laggard with no presence in the segment.

Despite losing the Honda tag, Hero remains one of the most preferred motorcycle brands amongst consumers (especially lower income buyers), topping the charts on mileage, after-sales service and resale value.

The survey also notes increasing aspirations for Honda, Royal Enfield and higher powered bikes in general. Royal Enfield, Shine and Pulsar are preferred by potential buyers (in that order).
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Old 1st April 2015, 17:52   #2
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Default Re: Survey: An insight on the Indian 2-Wheeler Market

Quote:
Originally Posted by GTO View Post

Convenience and cost effectiveness vis--vis public transport (savings of around Rs. 400/month) is the key factor which is driving demand for two-wheelers in India.
Not too sure about savings. A bus pass is always cheaper than the most efficient two-wheeler.
But yes, time taken to travel by a two-wheeler is much lesser than compared to a bus.

Quote:

In terms of brands, Honda reigns supreme with a thumbs-up from consumers across income strata, while Bajaj Auto is a clear laggard with no presence in the segment.
No surprise as BAL still doesn't produce any scooters. Wonder why they are so reluctant?

The bulletproof activa just brings some unbelievable sales figures for Honda.
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Old 1st April 2015, 19:24   #3
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Default Re: Survey: An insight on the Indian 2-Wheeler Market

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Originally Posted by D4D View Post

No surprise as BAL still doesn't produce any scooters. Wonder why they are so reluctant?

The bulletproof activa just brings some unbelievable sales figures for Honda.
I think we shouldn't really be disappointed with Bajaj. They seem to have a strategy and the fact that despite shaky sales, they have not budged shows their confidence (and there is a fine line between that and over-confidence ).

Honestly speaking, Bajaj is competing with manufactures with massive experience and who have presence across the globe. I think Bajaj is preparing itself to be future-ready by focusing on bikes.

Consider this, now there is a growing demand for higher-capacity bikes. Yamaha, Kawasaki, Honda simply need to bring one of their international models here. Whereas Bajaj, Hero, TVS need to build from scratch or source from someone.

Indian manufacturers simply don't have the bandwidth to respond to market like Japanese without compromising the roadmap.

I am pretty sure the manufacturers which do what they are good at will eventually succeed rather than those who are playing catch-up with market.
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Old 1st April 2015, 20:28   #4
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Default Re: Survey: An insight on the Indian 2-Wheeler Market

Quote:
Originally Posted by D4D View Post
Not too sure about savings. A bus pass is always cheaper than the most efficient two-wheeler.
But yes, time taken to travel by a two-wheeler is much lesser than compared to a bus.
Not quite true in Bangalore for sure. The normal buses are worse than Mumbai locals in terms of crowd, so I am leaving that out of equation here. And the Volvos, which are stuffed in the office hours and are far from luxurious, are way too expensive.

Plus the public means don't even provide point to point transport, there is always some walking or rickshaw involved.

Talking of tier 2 and 3 cities, with zero or very few city buses, there is only auto rickshaw in the name of public transport. Two wheeler always is cheaper and more convenient mode of transport. And if i am not wrong, the largest chunk of two wheeler sales comes from these small cities and towns
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Old 2nd April 2015, 14:33   #5
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Default Re: Survey: An insight on the Indian 2-Wheeler Market

Quote:
Some interesting findings:
  • Convenience and cost effectiveness vis--vis public transport (savings of around Rs. 400/month) is the key factor which is driving demand for two-wheelers in India.
  • 65% of survey respondents have cited the daily commute to work as the main reason for buying a two-wheeler. On the other hand, cars are popularly used for both, office commute and weekend travel.
Easily the main reasons for using a motorcycle. Switching between the bus/rickshaw/train/cab is more time consuming and costs more. As much as I crave the comfort of my car on my daily commute, the fact is I spend 1/4th the money (and time!) that I would with my car, despite riding a not-so-efficient motorcycle.

Quote:
  • New buyer budgets upward of Rs. 55,000-plus for two-wheelers, indicating premium aspirations.
  • The survey also notes increasing aspirations for Honda, Royal Enfield and higher powered bikes in general. Royal Enfield, Shine and Pulsar are preferred by potential buyers (in that order).
Commuter motorcycles are the most lucrative segment, but as people move up the car trajectory, so do motorcyclists. Not to mention getting a performance/lifestyle motorcycle is a lot less financially taxing than getting a performance car.

Quote:
With regard to scooters
  • In terms of brands, Honda reigns supreme with a thumbs-up from consumers across income strata, while Bajaj Auto is a clear laggard with no presence in the segment.
Honda took a gamble by entering a dying segment and it has paid off. The Activa has made its name a question of word association. Noodles=Maggi, photocopier=Xerox, Scooter=Activa. The model itself offers barely any features, but its reputation precedes it. Bajaj messed up and left a segment they were actually popular for.

Quote:
Despite losing the Honda tag, Hero remains one of the most preferred motorcycle brands amongst consumers (especially lower income buyers), topping the charts on mileage, after-sales service and resale value.
It's a question of the trust Hero has built. Bajaj lacks that outright. My uncle's Splendor was stolen around the time the XCD 125 was launched. He had the option of upgrading, but went and bought another Splendor. Tried, tested and trusted

Income conscious groups want fuel economy, reliability and a hassle free ownership experience. Like Maruti, that's exactly what Hero is known for.

Last edited by Tushar : 2nd April 2015 at 14:34.
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Old 3rd April 2015, 13:13   #6
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Default Re: Survey: An insight on the Indian 2-Wheeler Market

Bajaj made a stupid decision in terminating their scooter line, in our hindsight of course but being a big two wheeler manufacturer they should have had some foresight regarding that. They basically shot themselves in the foot but also like a govt company didn't innovate even a tiny bit in scooter segment, this is one big lesson in Indian automotive scene.
There is no way in a country like India that only bikes will be successful as two wheelers.
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Old 9th April 2015, 18:35   #7
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Default Re: Survey: An insight on the Indian 2-Wheeler Market

Was just browsing the net for more data on the Survey conducted by Religare Capital Markets:

What I have done is just took screenshots of the data so that it better to understand the current status:


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SOURCE:
http://www.investmentguruindia.com/B...securities-ltd

Actual PDF document:

http://app.investmentguruindia.com/m...%2030Mar15.pdf
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