The multinational wave in two-wheelers kicked off in the 1980s, a good decade before the gates were thrown open to cars. Actually, it was an all-Japanese parade with Honda, Yamaha, Suzuki and Kawasaki which joined hands with Indian allies in a script that would completely change the landscape of the Indian two-wheeler industry.

At that point in time, Bajaj Auto was the monarch of all it surveyed with its geared scooters which constituted the most coveted asset in all Indian households. Nobody would have remotely thought that the same company would stop manufacturing them one day and become a specialist in bikes instead. But, then, we are ahead of the story. Honda tied up with the Hero group, better known for its cycle business, for bikes. It also entered into a joint venture with the Pune-based Kinetic group to make gearless scooters.

Yamaha opted for Escorts as an ally while Suzuki, which was on its way to rewriting history with Maruti Udyog for cars, teamed up with the TVS group. All these were equity-based alliances while Kawasaki and Bajaj confined themselves to a technical tie-up. It is, incidentally, the only marriage that has not only survived but strengthened with time. As bikes from each of these joint ventures began hitting the roads, there was tremendous excitement in the market.

Gearless scooters

What was equally interesting was the gradual build-up in gearless scooters and, consequently, the Kinetic Honda brand. Women across India found this an attractive alternative to public transport and it was only a matter of time before men got rid of their macho hang-ups and gravitated towards these gearless scooters. After all, they were the best bet on our crowded roads. A gradually changing landscape rapidly turned into an avalanche where geared scooters become almost obsolete overnight and motorcycles took over.

It was clear that customers wanted change and grabbed it with both hands when it was offered to them. Bikes were perceived as more stylish and promised the moon in mileage. And even traditional (geared) scooters offered benefits such as greater storage, nobody really seemed to care. It was a young India which craved for bikes and the momentum has only increased since then.

In the process, leadership positions also changed and Hero Honda took over the mantle from Bajaj Auto by the turn of the century. It was also the most sought after brand in the market leaving Yamaha and Suzuki way behind. Bajaj had also figured out that it made greater business sense to focus on bikes simply because they were no takers for geared scooters.

Hamara Bajaj

The ‘Hamara Bajaj’ slogan still touched a chord except customers wanted a change in product. Bikes were the way forward; there were no two ways about it. By this time, some of the Indo-Japanese alliances were coming unstuck. Honda parted ways with Kinetic and decided to make its own gearless scooters from a new entity, HMSI (Honda Motorcycle & Scooter India), which would not compete with the hugely successful Hero Honda. Yamaha and Escorts, likewise, decided to call it quits.

On the face of it, this should not have been a setback for the Japanese bike maker which had made such a strong connect with young buyers. Yamaha, however, realised that the process of setting its house in order was a marathon task. It just lost the momentum in the Indian market and is now attempting to rewrite a comeback script.

Parting ways

TVS and Suzuki then announced the next high-profile divorce though it was perhaps not entirely unexpected with reports doing the rounds that the partners were really not on the best of terms. A confident TVS had also tasted success with the 110 cc Victor which it had created on its own. It was testimony to the company’s competence and observers believed that it could now travel solo comfortably.

Suzuki then decided to set up its own two-wheeler plant in Haryana, which was also the manufacturing base for its Maruti range of cars. Bajaj and Kawasaki were still together but there were bigger challenges on hand especially with Hero Honda getting stronger by the day. For a company which had been in scooters for decades, the transition to motorcycles was not the easiest of tasks. Yet, there was really no way out considering that this is what the market wanted.

Pulsar trigger

There were interesting initiatives such as the 125 cc Wind which was intended for Kawasaki’s global operations but Bajaj was working on something bigger which would change its image in biking. The Pulsar was the perfect trigger in a market saturated with commuter bikes. Here was a powerful motorcycle which caught the imagination of customers wanting that special something extra. The Pulsar fitted the bill and was the perfect takeoff pad for Bajaj in bikes.

Yet, there was no getting away from the fact that commuter bikes accounted for the lion’s share (over 75 per cent) in overall sales. It was here that Hero Honda had a twin bonanza in the Splendor and Passion which literally captivated the market. There was still no challenger in sight. The TVS Victor had taken off with a bang but just could not sustain the momentum. Yamaha was still in all kinds of problems after its split with Escorts and just could not get its product development plans on track.

Activa shows the way

In the meantime, HMSI was firing on all cylinders with the Activa gearless scooter which left its former ally, Kinetic, literally clueless on a counteroffensive. There was no question that Honda was pulling out all stops to ensure that nothing would go wrong in the gearless scooter script. The Activa became the biggest brand almost overnight and continues to lord over the rest today.

In the process, manufacturers such as Yamaha and Suzuki also joined the gearless scooter segment which is growing rapidly and accounts for over 20 per cent of the total two-wheeler space. After 26 years of togetherness, Honda and Hero finally decided to part ways in 2010. The Indian partner still had the successful Splendor and Passion which were clocking nearly three lakh units each month.

Discover & Commuter segment

Competition, however, was coming in from the Discover which was Bajaj Auto’s answer in the commuter segment. From Honda’s point of view, it was important to regain lost ground in bikes. Sure, it had proved a point in gearless scooters but taking on competition in motorcycles was going to be a different ballgame. And even while HMSI had launched the Unicorn, Stunner and Shine, it would have to do a lot, lot more to take on the might of Hero and, more specifically, the Splendor and Passion.

The Japanese automaker made it known that it was targeting production of 10 million bikes and scooters by 2020. It already has two plants and is ready to expand operations in the third being commissioned in Karnataka. HMSI could look at doubling the number of facilities over the next 4-5 years. The recently launched Dream Yuga is the first part of an onslaught in the commuter space and indications are that the product pipeline will see stylish, competitively-priced models. It will not be easy taking on Hero but rivals believe that they are equipped for the task because they have worked hard on their R&D over the years.

Bajaj Auto is going flat out with its twin branding strategy of the Pulsar and Discover focused on the sports and commuter segments. It is now keen on a bigger global play in bikes which it plans to leverage with Kawasaki and KTM of Austria in which it has a 47 per cent stake.

TVS’ comeback plan

TVS Motor is now working on a comeback plan in bikes and the 125 cc Phoenix is an important part of this journey. The company has other launches lined up over the next couple of years which will include scooters and motorcycles. It has also been in the news for an imminent tie-up with BMW Motorrad which could see some exciting initiatives at the manufacturing end.

TVS has been paying a lot of attention to quality and believes this effort will pay off in its future product line-ups. Interestingly, as the big names continued to slug it out over the years in the fiercely competitive bike arena, Chennai-based Royal Enfield was plotting its own strategy to stay afloat and remain relevant. Till 2004, numbers were little to write home about at barely 3,000 bikes a month but faith and tremendous hard work saw the Bullet maker stage a remarkable comeback.

Royal niche

Efficient manufacturing processes, exciting products and aggressive marketing aided by a growing buyer base of young enthusiasts led to Royal Enfield becoming a niche, fashionable brand. The clincher was the Classic which had the market queuing up and firmly signalled the company’s coming of age in the cruiser segment. The same company, which struggled to put out a couple of thousand bikes each month, is now clocking nearly 12,000 units.

It is also nearly ready with its second plant, also near Chennai, which will be a huge makeover from its present decades-old facility. Royal Enfield is also preparing to reach out to new global markets in Asean, Latin America and Africa in addition to Europe. And while top brands such as Harley Davidson are keen on growing their India presence with their impressive cruisers, Enfield knows it has its place secure in the market.

>murali.gopalan@thehindu.co.in

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