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Premium Bike Market in India

A report on Indian 200cc and above two-wheeler segment

Executive Summary

India which is counted amongst the largest two-wheeler market in the world stands next only to China

and Japan in terms of number of bikes produced and sold. With ever changing lifestyle and growing

disposable income bike is no more considered as just a mode of transport rather it has become a style

statement for youth. These factors have not only given the confidence to International bike makers to

enter this market with their premium segment but have also got them accepted by the consumers. This

has come to level that today Indian market has access to around 11 premium bike makers as against

only 7of the lower capacity bike makers.

In this context, we have picked this study in order to:

 Conceptualize the market and factors that have influenced the bike manufacturers to consider

India as their target for premium segment

 Establish relation between pricing, technology and regulation with the market acceptance

 Understand the future of the premium segment in India

In this report we will try to institute the macroeconomic factors and drivers including inflation and

import duties implemented along with benefits of outsourcing the manufacturing process or creating JVs

with already established local producers. This approach would enable us to create a relation between

demand and market of these premium bikes to mark the future of International manufacturers in India.
The result would illustrate factors and sensitivity of consumer towards the segment allowing us to

diagnose the underlying causes of recent trends – how has the premium bike segment seen a higher

growth than the middle capacity segment in developing country like India.

2. Introduction:

On road traffic along with conditions of motorway and affordability makes two-wheeler segment the

most loved category in Indian market with over 20 Million units being sold in year 2018. Even if the road

conditions are not supportive and mentality prevails to buy a four wheeler for family than buy a two

wheeler to commute, superbikes have still crafted a niche segment for themselves in Indian market with

almost 5% of market share being defined by bikes above 250cc capacity. Growing disposable incomes,

reduction in excise duties and local manufacturing done by International players are all expected to play

their part in growing this segment with a CAGR of above 25% in coming 5 years.

Year 2018 saw a growth of over 20% in premium segment bikes as compare to around 15% in bikes

displacing less than 250 cc. Harley Davidson is one of the first entrants in this segment and still holds a

special place in heart of youths that has been challenged by Royal Enfield as being locally produced and

most affordable premium bike in this segment. If Harley Davidson and Royal Enfield compete in cruiser

segment then Honda competes with Yamaha in the racing/ sports bike segment.

This report is designed to identify:

 The factors defining the premium bike segment

 Effective pricing and features sensitivity

 And mark the future of this segment

This report begins by setting out the need of two wheelers in India and then defines the competitors’

advantages along with Govt. regulations to carve out the future of International players in this market.
Understanding the Biking market in India

Once considered only a mode of commuting, the two wheeler segment was revolutionized by the entry

of Royal Enfield in early 1950s that was used by the army for border patrolling. The bike that was then

measured as a distant dream gave way to Royal Enfield acquiring measure market share in Indian

premium bikes today. With change in times the Indian market saw entry of players like Harley Davidson,

Ducati and others. Racing enthusiasts were taken for a ride by Yamaha through its RD350 which became

one of the most sought after bike after its launch in year 1973; this market was then completely

revolutionized by the entry of ‘Pulsar’ series by Bajaj that provided market with the most affordable

sports bike available ever. The Pulsar series made way for other manufacturers like Hero (then Hero

Honda) with its CBZ & Karizma and the market was then flooded with various other sports bikes. This

initial spark from few sports bike has shaped into a wild fire with both International manufacturers and

local producers coming into competition to acquire the premium bike market.

Fierce competition has made these bikes being priced more aggressively which has in turn helped this

segment to achieve superior growth. The national launch of these bikes tends to get host of changes

than its principal version. Alterations like trimmed body, chrome finishing rather than gold finishing and

a few parts being replaced with more affordable ones help these manufacturers with highly competitive

pricing while giving the bike enthusiast required adrenal rush. Alongside, few changes are made to keep

the premium bike well suitable for the road conditions while keeping in mind the riding abilities and

usage of the Indian bikers.

With a Y-O-Y growth of over 13% in disposable income for Star

last year and competitive pricing along with eased out

Govt. regulations for the premium bikes, today the Indian Premium bike segment falls under this category

two-wheeler market has changed from commuting to wherein the market has seen a splendid growth
personal liking and passion. What was once sold as status

symbol has now moved to being ‘Cash Cow’ for the

manufacturers while the potential shown by premium

bike has been immense over last few year with the surge

expected to continue in coming years as well.XQuestion

Mark and entrance of International manufacturers.

This is one of the most competitive yet

Electric two wheelers constitute this category as they are profitable categories of Indian two wheeler

running into a rapidly rising market however they have markets.

still not been able to get profitable due to their low

power and lack of confidence among consumers. With

increasing pollution and Govt. being very harsh,

companies need to invest in this category to convert it

into one of their stars


Cash Cow

All the bikes with lower engine capacity come

Dog under this bracket as they are trading in the

most stable market head. Bikes with 100 cc to

With the amount of growth witnessed by the Indian two- 150 cc make part of the major volume of sales

wheeler market there is no scope for any dog performed by every bike manufacturer. Even

though the competition here is cut throat still

every player is able to survive coz of the number

of units sold.
BCG Matrix for Indian two wheeler market

Partnership of Bajaj with KTM and entry of Duke 390 has modernized the market by giving an option of

most affordable premium and high performance bike in the segment. Despite it being one of the most

affordable premium bikes in market there has still been negligible impact on its competitors due to the

fact that this market is driven by brand value and consumer loyalty which is hardly impacted by any

other factors.

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