The Indian auto company, known for trucks, SUV and MUVs, Mahindra&Mahindra is entering the two wheeler market to take on the Japanese Honda’s Hero Honda. To tap all sort of customers, the company intends to deliver motorbikes in all ranges- low cost to super bikes, said the company’s Head for two wheelers. More information about this would come later, he added. M&M is setting the strategy to make the two wheeler segment on par its trucks and SUVs in a time frame of seven years. M&M is already in the scooter market for the past 4 years, ever since it got hold of Kinetic Motor.
M&M took this initiative after knowing well that the two wheeler market is on the higher note than the commercial cars on the ratio of 1:5. However, the industry analysts view M&M’s entry as a challenging, since the market is already dominated by the giants like Honda, Yamaha, Kawasaki, Bajaj and TVS. Of these, the major players are Hero Honda and Bajaj, whose combined share is two third of the net two wheeler market in the country. The sale of two wheelers in India during April-June this year was 2.7 million (554, 566 units). The industry analysts foresee a growth of 8.04 million units during the FY 2010-11. The corresponding sale of motorcycles during FY2009-10 was 7.34 million units. The market of scooters seem to prospect with already crossing 1.66 million indicating a gain of 14%. M&M’s entry into two wheeler is designed to have the best available in the industry- the bikes are to be designed by Engines Engineering of Italy, which is under the service of M&M from 2008. In a bid to boost its brand image, M&M is exploring other noted companies for JVs.
But the economical aspects focus on a different note- the share of M&M getting the vertical index- a rise of 2.4% @Rs616.75, counted as the fourth best performance, making the net rise to 14% in this year alone. M&M received a good stint with its scooters, a rise of 4 times for the period ending June 2010- by selling 27000 units, says a report from SIAM. This is in the net sale of the scooter industry in India, 28% (2.7 million units). The unprecedented growth in these three months is possible due to the purchase power of the customers. Taken for the company’s net growth, M&M has an upper hand (25%)than Hero Honda(16%) or Bajaj(15%). M&M has the top notch brand image in tractor, which constitutes 29% against 14% for cars, SUVs and trucks.
M&M is on the global auto industry badges when it took over Ssangyang Motor of South Korea. Following this move, M&M witnessed double growth in its income- 20.9 billion rupees during 2009-10. The net profit too increased to 21.8 billion rupees during the FY 2009-10. M&M is on the verge of exporting its motorcycles, on the lines of SUVs and tractors. The countries benchmarked for this are Africa, South Asia and Latin America.