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Old 9th September 2020, 16:43   #1
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Default Ridiculous price hikes of 2-wheelers in India

Note to Admin: Please disregard if there are any related discussions happening already.

Recently one of my colleague booked a RE350. He generally doesn't use Two wheelers much, so the conversation was like this.

Him: Anna (Bro), I booked an RE350 as my Shine (Honda) is almost dead.

Me: You hardly use two wheeler, then why to invest so much on it? Why don't you buy a Honda itself again!

Him: You know how much does it cost? I checked with dealers a week back they are quoting around 95K.

Me: Yes, I remember Unicorn was around 80K few years back so with BS6 this that it should definitely be around 95K, but its still better than investing on an RE350 (to run a maximum of 1k kms per year).

Him: In which world are you? The price am talking about is for Honda Shine, not for Unicorn. Unicorn is more than 1.20 Lakh.

Me: : Whaaat?!

To be frank I stopped following two wheeler market for more than 6-7 years now. But this hike in pricing is simply indigestible for me.
Does it really cost so much to upgrade to BS6 for the makers or they are simply stealing money from people using this pandemic situation.

People are afraid to use Public transport and moving more towards using their own vehicles these days, in this scenario 2 Wheelers are the only option for Lower and Lower Middle Class families. I feel the two wheeler manufacturers are taking full advantage of it and literally stealing money from the customers.
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Old 9th September 2020, 19:36   #2
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Default re: Ridiculous price hikes of 2-wheelers in India

I think the hike in price is warranted considering every bike needs to be fuel injected to satisfy BS6 norms, as well as the addition of ABS. I'm guessing that these two components would add around 15-20k on the price of any bike. Even the humble XL (now 100cc) has fuel injection!
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Old 9th September 2020, 20:00   #3
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Default re: Ridiculous price hikes of 2-wheelers in India

It's a free market, and a competitive one at that. If companies were making fat profits, someone would undercut them and launch bikes at lower prices.

The price hikes over the last six or seven years also have a lot to do with inflation, which is pretty high in India.
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Old 9th September 2020, 20:06   #4
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Default re: Ridiculous price hikes of 2-wheelers in India

Quote:
Originally Posted by ₹itzylove View Post
Recently one of my colleague booked a RE350. He generally doesn't use Two wheelers much, so the conversation was like this.

Him: Anna (Bro), I booked an RE350 as my Shine (Honda) is almost dead.
How much is the RE350 on-road now? I bought the Classic 350 back in June 2014 for 1.3 lakhs on-road! Just imagine the price increase in 6 years.

Commuter bikes cost almost a lakh rupees nowadays. Sad but true!
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Old 9th September 2020, 22:06   #5
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Default re: Ridiculous price hikes of 2-wheelers in India

I fail to see what the problem is.

After using an inflation calculator I find that the Bajaj Pulsar P220 I bought for about 100k in 2015 is priced at a tad above 130k in 2020, which makes sense cause when I simply add the cost of extra components i.e ABS, I arrive at the same ballpark at which the motorcycle is currently available 140k OTR.

So simply put the motorcycle still costs the same it did half a decade ago when factoring in cumulative annual change of about 30% for the 5 year period beginning 2015 and ending 2020.

Calculator

P.S. A little off base but in essence a bit of the same is discussed in the below video;



Regards,
A.P.

Last edited by ashwinprakas : 9th September 2020 at 22:17.
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Old 9th September 2020, 22:25   #6
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Default re: Ridiculous price hikes of 2-wheelers in India

Quote:
Originally Posted by ashwinprakas View Post
I fail to see what the problem is.

So simply put the motorcycle still costs the same it did half a decade ago when factoring in cumulative annual change of about 30% for the 5 year period beginning 2015 and ending 2020.

Calculator

P.S. A little off base but in essence a bit of the same is discussed in the below video;
Thanks for the calculator! So the 4.93 lacs I spent on my i10 in 2013 come to around 7.40 lacs now..which is roughly in Nios Turbo ex showroom ballpark. So the prices have been consistent.

However, we should not neglect the costs the IM's (Industry Majors) have spent on Research and Development, tooling, technological upgrades etc. No IM or their suppliers are making a ton of money at our expense, as I've come to know from sources. It's still a competitive market out there.
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Old 10th September 2020, 00:22   #7
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Default re: Ridiculous price hikes of 2-wheelers in India

Quote:
Originally Posted by ₹itzylove View Post
in this scenario 2 Wheelers are the only option for Lower and Lower Middle Class families. I feel the two wheeler manufacturers are taking full advantage of it and literally stealing money from the customers.
That is essentially the economics of supply and demand. The only thing that can bring the prices down is another manufacturer starting to make less expensive bikes that sell well. Unless there is deceptive pricing, or cheating, - stealing would be the wrong choice of words.
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Old 10th September 2020, 00:46   #8
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Default re: Ridiculous price hikes of 2-wheelers in India

Quote:
Originally Posted by ₹itzylove View Post
People are afraid to use Public transport and moving more towards using their own vehicles these days, in this scenario 2 Wheelers are the only option for Lower and Lower Middle Class families. I feel the two wheeler manufacturers are taking full advantage of it and literally stealing money from the customers.
Not really. I somehow feel it's more to do with which generation we belong to. 80s born folks mostly got their first bike in their 20s when 55-65k was the norm for 150cc commuter segment. For 90s kids same thing shifted to 80-90k & for folks born in this millennium 1-1.3L for the same 150cc bike is business as usual. Infact even I couldn't digest the prices when I started looking for a change for my 12 year old RTR around 2019. But if you follow the inflation it kinda makes sense.

Quote:
Originally Posted by ashwinprakas View Post
As per this calculator my INR65k 2007 RTR160 should be around ~1.7L now. But it costs 1.15L(non-4v) and that too with abs.

Ridiculous price hikes of 2-wheelers in India-screenshot_202009100024302.png

So it actually got cheaper over time? Kinda makes sense with technology getting cheaper over the years and ofcourse this segment increasing in scale.

Last edited by SoumenD : 10th September 2020 at 00:54.
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Old 10th September 2020, 01:07   #9
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Default re: Ridiculous price hikes of 2-wheelers in India

Come to think of it, I find it a ridiculous too, on a case to case basis. Justified maybe due to additional hardware such as ABS and FI but still difficult to comprehend the price increase for some. Case in point, I bought Aprilia SR150 exactly 3 years back at 80k (I bought without any offers and swiped my CC so discount was slightly less but people even bought the same for 76-78k back then iirc). Now jump three years ahead and the Aprilia SR160 costs a whopping ~60% more from my purchase price. Do note it's just 5cc increase by over boring the same engine block which gives hardly 1bhp increase in power, real world performance though is same or worse than old model. How is the price bump by 60% justified for ABS, FI, engine tweaks and a new panel?
When I bought it, people suggested I overpaid for a scooter by 20k as I could easily get Activa or Jupiter by 60-62k back then. Just to compare, the price increase for the Activa and Jupiter is hardly 25% during the same timeframe and these aren't any less popular than Aprilia.

All said and done, I absolutely love the Aprilia SR150 for what it is and would have wanted it to be more accessible to the masses. Alas, it has its own niche and fan base so although a handful, there'll be people buying it for what it is i.e. simply an amazing scooter with unmatched handling and power in its category
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Old 10th September 2020, 02:46   #10
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Default re: Ridiculous price hikes of 2-wheelers in India

While I agree that taking inflation into account prices from 5-10 years ago are consistent with what we see now.

However probably the reason people are suddenly noticing the rising prices can be attributed to the sharp price difference caused by BS4 to BS6 transitions.

But here again there is more to what meets the eye

Case being -

Honda Shine - Price increase in BS6 transitions 7-10K, changes other than BS6 engine - 5 speed gearbox, tweaked and lighter frame.

Honda Unicorn - Price increase in BS6 transition - 12k+, changes other than BS6 engine - it is actually a new/different bike.

Honda X-Blade - Price increase in BS6 transition - 17k+, changes other than BS6 engine - FI and Optional Rear Disc brake the only significant change.

From the above two examples you can see that Shine and Unicorn can actually justify their price hike in BS6 transition whereas X-Blade price hike really makes no sense (Honda actually placed X-Blade in place of previous gen Hornet but that is not a justification of this hike).

So either X-Blade was previously giving too less profit margin or is now looking for too much of profit margin.
Judging by how Honda priced Hornet 2.0 X-Blade price hike looks even more ridiculous now.

So while a lot of bikes actually justify their current prices taking into account inflation and all other upgrades they have gone through over the years yet some bikes like X-Blade while their overall price may not be exorbitant but this kind of sudden price hike they have seen is not justified.
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Old 10th September 2020, 02:59   #11
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Default re: Ridiculous price hikes of 2-wheelers in India

Quote:
Originally Posted by ashwinprakas View Post
I fail to see what the problem is.

After using an inflation calculator I find that the Bajaj Pulsar P220 I bought
Taking a more 'benchmark' example of the common Honda Activa.

Activa 2G 2013 - 44,200/-
Activa 3G 2015 - 48,852/-
Activa 4G 2017 - 50,730/-
Activa 5G 2018 - 52,460/-
Activa 6G 2020 (Now) - 65,419/-

Why people are generally surprised? A graph makes it pretty evident -

Name:  Activa_Prices.png
Views: 8042
Size:  8.9 KB

Because the recent price jump with BS6 truly is unprecedented and not the slow inflation increase in prices we are used to! While every other so-called 'G'eneration jump caused a price increase of around 2k INR every two years, the current prices are 13k INR above the 5G model.

Thats a whopping ~25% more than last year and the increase in on-road price is even more significant.

Have heard this remark outside the forum as well - many people are yet to hear the modern 2 wheeler prices post the BS6 era (thanks to COVID) and the news delivers a punch alright. On a personal note (and one from an older perspective) - My old Pulsar 180 costed less on-road in the last decade than a 2020 Activa's ex-showroom price.

Quote:
Originally Posted by ₹itzylove View Post
Does it really cost so much to upgrade to BS6 for the makers or they are simply stealing money from people using this pandemic situatio.
There are multiple factors IMHO, in addition to general inflation -

1. Fuel injection on entry level motorcycles as well.
2. Better catcon and exhaust systems to meet BS6.
3. New mandated features - ABS on 125cc+ motorcycles, CBS on others, for example.
4. Insurance rulings - Multiple year third party insurance coverage upfront, increase in premiums etc.
5. New tech - LED headlamps, for example.

Last edited by CrAzY dRiVeR : 10th September 2020 at 03:06.
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Old 10th September 2020, 03:30   #12
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Default re: Ridiculous price hikes of 2-wheelers in India

I bought my P220 DTSi (right after launching) @ Rs. 80,650/- (on road). I didn't get any discount, no benefit since it was in demand & being new model. So bought it at sticker price.

Right now it's close to Rs 1.6L for BS6.

What has changed?

It's got ABS & BS6. Everything else is same.

Price has just doubled in 10 years. Is it justified?

I wonder if salary of the assembly line worker of this bike has doubled too

Last edited by NaXal : 10th September 2020 at 03:47.
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Old 10th September 2020, 06:51   #13
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Default Re: Ridiculous price hikes of 2-wheelers in India

The cheapest motorbike (CT 100) is now close to 50k! This is almost half of what a blue collared employee earns in India in a year. The trouble is that salaries in India have stagnated since long, and that's why the bike seems expensive. Honda seems to be more expensive than the rest though.
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Old 10th September 2020, 10:19   #14
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Default Re: Ridiculous price hikes of 2-wheelers in India

Interesting trend indeed. While some of the hike % can be attributed to introduction of FI, ABS/CBS and multi year insurance etc, what beats me is that the new two wheelers launched in 2019(already compliant with BS6) also decided to conveniently increase the prices. Now they are looking up to the sky for the Govt to reduce GST, which i feel is necessary at least in the budget spectrum as the commuters today are overlapping with higher capacity/performance oriented options.
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Old 10th September 2020, 11:00   #15
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Default Re: Ridiculous price hikes of 2-wheelers in India

I think there is some confusion about "cost" and "Price". "Cost" is the actual money spent on R&D, personnel , hardware etc. This is your base line. Its there and its a no brainer that it needs to be recovered from sale proceeds. Some components of the "Cost" get recovered after reaching break even sale numbers. After that "costs" simply disappear or become negligible.

"Price" on the other hand is what the market can support for your product. The selection of proper "Price" for your product is going to be the all important factor which would determine if you fail or succeed in any given market. The relationship between these two is not as simple as a "Price" = "Cost" + Margins. Sometimes "price" is lower than the "Cost" for strategic reasons. In other words "price" is all about demand and supply , its dynamic and market dependent.

In india , 2 wheeler price is based on many factors like

1. Average family income of target audience.
2. Interest rate of auto loans
3. Life expectancy of product
4. Convenience.
5. Currency weakening/ strengthening

Just to name a few.

None of these factors are related to technical aspects (like ABS, EFI etc ) of the product but related only to what your target audience would pay for your product. It may be that the average 2 wheeler buyer has higher spending power than what was ,say , 10 years back. So , he/she , may be willing to spend more for a product without compromising on other financial needs. There are many market research agencies which help companies gauge this aspect.

To give you an example of how pricing is done, take for example , a fighter airplane. Now the company prices it after taking into consideration what the army of a particular nation is willing to pay for its defense based on geo political considerations. Its not about the "cost" of sophisticated systems, its about good marketing of diplomatic relations, careful lobbying etc.

In spite of all this i know of some PSU companies who ask you to declare that you are not selling a product at a lower price than what you are giving to them .

Last edited by srini1785 : 10th September 2020 at 11:03.
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