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|25th July 2007, 01:14||#1|
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Suzuki Motorcycle unveils two year strategy
After a slow beginning to its India operations, Suzuki Motorcycle India (SMIL) has chalked out pans to infuse more life into its strategy for the Indian market.
Sales of its two bikes – the Heat and Zeus — which the company had launched during the Auto Expo in 2006 haven not quite made the impact the company was keen to have in the market, and this has made it rethink its plans for the Indian market. The first attempt at that direction will be the introduction of a scooter by September this year.
In fact, an interesting two-year strategy is being drawn up to ensure correction in the image it has created for itself in the 18 months it has been operating in India. It is often felt that the customer perception for Suzuki Motorcycle has taken a beating, mainly due to the indifferent performances of its two 125cc products.
In the first year, which is the current fiscal, the 125cc scooter will be the first product launch, followed by a 125cc bike that would be focussed on a competitive price point of around Rs 35,000. By March 2008, the company intends to get into the 150cc bike segment. Moreover, the company is now studying the finer details of the government’s policy that allows companies to import bikes above 800cc.
‘We are still studying the finer points, but should be able to bring some product by the fiscal-end. We can get products that conform to Euro 3 norms. We have a lot of products in the range but have not yet finalised on any one,’ said Vice President – Sales & Marketing, SMIL, Atul Gupta, in an interview with Auto Monitor. It is a niche market and the numbers will be limited. Gupta said it is also important to ensure the spares and service availability for these products before they are introduced in a market.
The scooter meanwhile, would be ‘class defining’, Gupta said, and in its segment, will be the most powerful, yet fuel-efficient scooter. Its target audience will be the youth. The product, he added has been specifically developed for the Indian market. ‘We are aiming to plug the gap between 100cc and 150cc segment in scooters. It will be a 125cc variometric scooter,’ said Gupta. The company expected scooters to contribute about 20 per cent in its overall target of 1.2-1.3 lakh units in 2007-08.
The company realises it did not have the best of starts with the bikes, and hence would like to go slow with the scooter. Although no targeted figures were revealed, it is understood the company would opt for conservative estimates, at least to start with. The launch of the scooter, Gupta said, might not be conducted country-wide. ‘We would launch the scooter in a zone-wise manner. Even the dealers need to learn the art of selling two different segments of products,’ he said.
As per Suzuki estimates, the growth in the scooter market to be smaller as compared to the motorcycle market. However, when it comes to scooters today, there is no real challenger to Honda Motorcycle & Scooter India (HMSI). ‘We have a strong scooter portfolio and we feel that just by being present in this market, we could have a pie of the growing market and some of the current market. There is no real 125cc scooter in the market today and the 100cc scooters do not have the power or the mileage. Our USP will lie in better power and mileage,’ Gupta said. The second part of the strategy would look at the next fiscal, 2008-09. The company could look at replicating this fiscal’s plans in the coming year. In the pipeline are a new 125cc bike intended more towards the urban side. The second product in 2008-09 could be another high-end (150cc and above) bike, while the third would be a new scooter. The company is yet to freeze the next product in scooter, but Gupta confirmed it would be above 125cc.
Overall, the company will concentrate on the 125cc segment for the mass market, but in that it will have different price points. Beyond that, in 150cc and above, the company will bring in more image-driven products, rather than aiming for volumes. The company realises it is a limited market, but will get into that next fiscal.
Gupta hinted the company could introduce two different 125cc engines. The existing125cc engine would be continued for the mass market. ‘When we move towards the feature-driven urban 125cc product, the engine could be different. It could be more powerful,’ he said. This new engine could well go into the new Zeus Suzuki intends to bring in this year.
In the 12 months of commercial production, the company has not been able to reach the length and breadth of the country. While the products failed to create their own space in the segment, the lack of a country-wide dealership network has also not helped matters.
As of today, there are 125 SMIL dealerships across the country, which would increase to 220 by the end of fiscal 2007-08.
‘When the Zeus and Heat were launched, the perception for both the products were different. The Zeus was thought to be an urban product and Heat as a semi-urban product. But the target group was possibly below that. There was a mismatch and we have worked towards correcting them now,’ admits Gupta.
Suzuki is adopting a three-way strategy to counter the image deficit it has been experiencing. The company believes the way forward is to have an all-India presence. A complete range of products will be the second attempt towards recreating the lost image, while ‘a really strong sales and marketing network, both below and above the line, would ensure our presence among the top manufacturers,’ Gupta said.
An image correction of sorts is required, more so in the urban markets. The company is looking at correcting and building that up through the scooters and other new bikes. Secondly, in niche markets, the introduction of bikes above 800cc is expected to give the company’s image a major boost.
The first two months of the year have seen a significant increase in sales for SMIL products. According to data released by SIAM, the company sold 5012 units in May, 733 units more than what it sold in April. ‘Although the industry has declined on a monthly basis, we have not declined. We have gone up in May from April. Even June will, be higher than May,’ Gupta said.
In the two month period of April and May, the two-wheeler industry has experienced a de-growth of 8.02 percent, while motorcycles sales alone have fallen 13.20 percent. Scooters on the other hand, have grown 17.78 percent.
‘We are not chasing market share, at least not for the next two years,’ said Gupta. The company has seen good, positive response down south. It has managed to be No 4 in almost all southern states after TVS, Hero Honda and Bajaj. ‘West is still ok, but north has been very bad. After the correction, we expect that we should be able to target the right people,’ he said.
With the right kind of marketing activities, Gupta feels the company can easily do about 10,000 units a month. This number is achievable with the present 125 dealers, he said. SMIL is adding 10 dealers every month and by the end of the fiscal should reach 220 dealers. ‘We are not competing with anyone, not even the industry. We are competing with ourselves. This would continue at least till March 2009. By then we should have a range of products and at least 250 dealerships,’ Gupta said.
In May, the company also started a small number of exports - 88 units- to Nepal. Till recently, exports to Nepal were originally from Japan, and routed through China. From now on, this would be from Suzuki India. The company is also eyeing new markets for exports, and in the next three to six months, plans to commence regular exports to Nepal, Bangladesh and Sri Lanka. There have been big enquiries coming from several Asian and African countries. ‘We know we can do it, but we are holding it for the time being,’ Gupta said.
Suzuki Motor Corporation (SMC), Japan, has 74 percent stake in its Indian subsidiary, Suzuki Motorcycle India (SMIL). SMIL marks Suzuki’s re-entry into the Indian two-wheeler market after TVS and it parted ways in 2000-01. Suzuki was the technology provider to the erstwhile joint venture company, TVS Suzuki.
It has always been felt that the company would need to embark on a brand-building exercise to project its new avatar of a wholly owned motorcycle-manufacturing subsidiary. Despite Suzuki’s status of a global motorcycle giant, in India it is better known as a car manufacturer, through Maruti Udyog.
Source: Auto Monitor
Finally Suzuki Motorcycle India has learned a lesson, hope we get better motorcycle's from the Japanese giant
Last edited by vijay_k : 25th July 2007 at 01:22.
|25th July 2007, 02:24||#3|
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IMHO, Suzuki should also focus on the looks and styling aspect as well. I dont think, the Heat and the Zeus have appealing looks. This is just my perception though.
|25th July 2007, 10:01||#4|
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they used to sell a 150cc bike, pumping around 16-18bhp, in thailand. but that was a couple of yrs back. but i think, 2008-2009 will be too late for a 150cc from suzuki. awaitin the 125cc scoot though
|25th July 2007, 10:29||#5|
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suzuki's just another player in an already crowded market. they dont have good brand recognition as many people still associate the TVS name with Suzuki. I think they should just look for a niche and stick there. How about a 400cc twin for the market suzuki?
|25th July 2007, 10:40||#6|
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Absolutely right, you tell someone to get a suzuki & they will say TVS Star ? a lot of people still haven't shed the suzuki from TVS. Suzuki will have to do something different if they want people to sit up & take notice.
|25th July 2007, 11:19||#7|
Join Date: Nov 2006
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Honda came into the market with a bang.... the Activa was launched when the only competation was from the kinetic honda...again with the Dio ,they launched it at the right time.... with great looks and quality..
and again with the Unicorn, with its Monoshock(still the only bike with a monos )and amazing gearbox and engine..
Suzuki should have done something similar..
|25th July 2007, 11:50||#8|
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This weekend, saw a gorgeous blue hayabusa at the kollam (kerala) showroom. Both the zeus and the heat were looking like puny mopeds in front of the hayabusa.
|26th July 2007, 16:01||#9|
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Suzuki on the right path
Suzuki is on the right path I guess, not withstanding the humble self assesment of the company itself. In an year they have managed to setup a fairly strong operations. The focus on strengethening production, sales and service networks is important to support a strong demand which will happen.
But who will believe Gupta when he says that he is not chasing market share?!?! He himself, later, is giving his assesment of how he has fared region wise. Now ..Suzuki has close to 1% market share, insignificant ..? No.
Look at their growth - Suzuki has grown 35%+ quarter on quarter and more than 5000 units in a month, better than Kinetic!
But to sustain and reach a tipping point of say '10% +' market share, (which is needed to consider themselves a significant player) Suzuki has to understand the Indian market better - both the commuting segment for volumes and riding segment for niche.
Zeus and Heat - first unsteady steps. Lets see if Suzuki can take the long strides which its capable of taking, in the near future!
|13th August 2007, 09:32||#10|
Join Date: Apr 2007
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Suzuki needs to work on the looks for their current bikes. Engine wise they are quite above bajaj , hero honda and are equivalent to honda engines . I am talking above engine refinement , clutch , gear shifting , and not in BHP terms.
But in looks , both bikes are looking like that they are below even 100 cc bikes from bajaj. There is no real differentiator in first look for these bikes. And in that segment people will always prefer the bajaj , TVS and hero honda reliability.
I am also not clear about one thing from these big names like honda suzuki yamaha..
When people are waiting for big bikes ( above 500 cc )from these big name and are ready to pay the premium , why the manufacturers always start from very low segment like 100 / 125 cc?
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