India’s Burgeoning Two-Wheeler Market

India's motorcycle segment is broadly categorized into three segments: 1) entry or economy, priced at Rs 33,000; 2) executive/commuter, Rs 40,000-45,000; and 3) premium/leisure, Rs 50,000. Until recently, most sales came from the executive segment, followed by the entry level and then the premium segment.
However, sales of entry-level bikes have gone up substantially in recent months, as manufacturers are launching technologically superior and competitively priced models, reported India's Times News Network, quoting market sources.
The Times recently reported sales of executive segment bikes during the first eight months of the year declined as a percentage of total sales from 54% to 48%; entry-level bikes moved up to 45% from 34%; and the premium segment dropped slightly from 12% to 7%.
India's motorcycle leader, Hero Honda Motors Ltd. said it sold 246,304 two-wheelers in August, up from 191,635 units in August 2004. India's prominent Munjal family and Japan's Honda Motor Co. each hold a 26% stake in New Delhi-based Hero Honda.
The country's second largest suppliers of two-wheelers, Bajaj Auto reported sales of 164,020 units in August, up 37% from 119,895 units sold in August 2004.
TVS Motor Co. Ltd. (532343.BY), India's third largest cycle supplier, sold a total of 105,000 two-wheelers during August. The company retailed approximately 60,000 motorcycles during the month, up 25% from motorcycle sales in August 2004.
In related news, Yamaha Motor Company is planning to set up a second wholly owned subsidiary in India.
The new subsidiary would co-exist with the company's current Indian subsidiary, Yamaha Motor India, and would engage in trading two-wheelers and parts manufactured by Yamaha Motor India. Yamaha's sales in India declined in the last fiscal year to 212,985 units from 213,767 units in the previous year.
The proposed subsidiary would be 99.99% owned by Yamaha Motor Company, Japan, while Yamaha Motor Asia Pacific will have a stake of 0.01%.
Yamaha has hinted at the possibility of importing scooters and premium, high-powered motorcycles into India. The company's proposed subsidiary in India also received permission from the Foreign Investment Promotion Board (FIPB) to engage in trading of other products including all-terrain vehicles, generators, multi-purpose engines, water pumps, electric hybrid bicycles, racing karts, and golf cars among other products manufactured by Yamaha Group companies outside India.

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