NEW DELHI: The demand for powerful bikes with engine capacity between 150cc and 500cc is on the rise with this segment gaining huge traction among bike lovers. According to experts, the trend is likely to continue in 2018 as well. The latest to join the race is TVS Motor with its 310 cc motorcycle Apache RR310 priced at Rs 2.05 lakh. In the months to come, the segment will see more such launches as original equipment manufacturers (OEMs) are keen to tap the growing market.
According to Puneet Gupta, associate director of consultancy firm IHS Markit, the segment is set to grow at high double-digit figures in the next few years. “First, the base is low and second, there will be many new products in the segments,” Gupta told Express. He added that growing aspiration of people, emergence of bike clubs and better highways will supplement the growth. Sales of motorcycles in the premium category surged to 1.4 million units in 2016-17 from 4.6 lakh units in 2011-12, making it the fastest-growing segment in the market. In the current calendar year, the segment already clocked sales of 2 million units, up 20.5 per cent from a year ago. Even though the numbers are small compared with the overall two-wheeler sales (around 70 million per annum), the premium segment offers greater margins and a huge scope for growth.
“There is no doubt that big bikes provide big profits. OEMs will continue to expand their presence in the segment but to churn out profit they will have to work on volumes. Look at Royal Enfield. They continue to target the high end customer and remain one of the most profitable auto companies in the world,” Gupta noted.For the September quarter, Eicher Motors, the maker of Royal Enfield motorcycles, posted the highest margin among OEMs at 31.5 per cent while Bajaj Auto, the maker of Pulsar, Avenger and Dominar brands, posted a margin of 20.8 per cent.
Competition in the segment is also set to grow with the entry of TVS Motor. “We are confident this will improve our growth and market share in the premium segment,” Sudarshan Venu, joint managing director of TVS Motor, stated.Meanwhile, players like Hero MotoCorp, which dominates the entry level segment, are also set to make an impact in the premium segment. Hero is expected to launch at least two motorcycles in the premium segment in 2018.