Car Motorcycles Luxury Rubber meets the road in premium bike market admin August 20, 2023 0 New Delhi: The premium motorcycles segment is getting crowded. And why not? Profit margins are higher, and the demand is anyway muted for entry-level two-wheelers. Hero MotoCorp Ltd in partnership with Harley Davidson has launched the Harley-Davidson X440, and Bajaj Auto Ltd in collaboration with Triumph Motorcycles launched Speed 400. Both these motorbikes are in the above-250 cc segment and have been priced competitively, opening the doors for better customer acceptance. “We think this will lead to faster premiumization of the two-wheeler industry,” said Kumar Rakesh, an analyst at BNP Paribas Securities India, in a report on 6 July. Investors in Hero and Bajaj Auto are excited, perhaps a bit more than warranted at this stage. Shares of both automakers hit new 52-week highs on Thursday. View Full Image Graphic: Mint Speed 400 is priced at ₹223,000 for the first 10,000 units and ₹233,000 thereafter. This is roughly in line with base variant of Harley-Davidson X440. Pricing of both vehicles is at about 20% premium when compared to base variant of Eicher Motors Ltd’s Royal Enfield (RE) Classic 350 cc. “Speed 400’s aggressive pricing shows Bajaj Auto’s determination to disrupt the segment, after having failed to do so with Avenger and Dominar earlier,” said BNP report. Speed 400 will be available through Triumph’s dealership network, which is likely to expand to 100 showrooms across 80 cities by FY24-end. Scrambler 400 X will be launched in October and the price will be revealed later. However, it is worth noting that Triumph’s success in India has not been impressive. “Triumph has so far struggled to ramp up volumes in India, selling only about 1,000 units annually, due to high vehicle prices,” said analysts at Jefferies India in a report on 5 July. The broking firm notes that the cheapest Triumph motorcycle in India thus far is 660 cc Trident priced at ₹812,000, about four times the price of RE Classic 350 cc. Now, with the Bajaj-Triumph vehicle being priced lower, affordability increases for the Indian consumer. The planned capacity for the Triumph bikes is 5,000 units per month, which would be further expanded based on how demand pans out. The vehicles would be launched in international markets such as UK, North America, South America, Japan and southeast Asia by 2023-end. Bajaj Auto’s investors are optimistic, what with the shares gaining 36% so far in 2023. To be sure, since Speed 400 is priced competitively, the near-to-medium term margin trajectory needs closer attention. “Given the features and components going into Speed 400, one needs to monitor how gross margin shapes up given the competitive pricing of ₹233,000. Further, marketing spends and royalty fees are likely to weigh on Ebitda margin,” Varun Baxi, an analyst at Antique Stock Broking, said. Currently, RE holds the largest market share in the above-250 cc category at 88%. This also means there is room for more companies, offering more choices to consumers eventually. However, the launch of Bajaj-Triumph and Hero-Harley at competitive pricing poses a significant risk to RE’s market share. Investors in shares of Eicher Motors seem to have taken note of this, evident from the 10% drop in the share price this week. All said, the premium two-wheeler segment promises to be action-packed in coming months. Nomura Financial Advisory and Securities (India) expects more product launches in the above 250 cc segment from Triumph, TVS Motor Co., Yamaha Motor India, Hero, and Honda Motorcycles and Scooters India. The BNP Paribas report title sums it up aptly: ‘The premium motorcycle’s moment is here.’ link Tags: Bike, Market, meets, premium, Road, Rubber Continue Reading Previous Luxury Brand Curtiss Motorcycles Marks 120th Anniversary by Reinventing Two-Wheeled Electric Motoring / Securing Patent for Symmetrical Motorcycle DesignNext The 10 Coolest Adventure Motorcycles You Can Buy More Stories Car Motorcycles Luxury Why EVs Are the New Status Symbol admin November 24, 2023 0 Car Motorcycles Luxury Best Car Shipping Companies of 2023 admin November 22, 2023 0 Car Motorcycles Luxury Corn-Fed Luxury on Two Wheels admin November 19, 2023 0 Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment.