Companies

Suzuki Motorcycle to exit mass segment, target premium play

G Balachandar | Updated on June 07, 2019 Published on June 07, 2019

Suzuki Motorcycle India Gixxer SF 250   -  Via Suzuki Motorcycle India website

Suzuki Motorcycle India Pvt Ltd (SMIPL) has signalled a major shift in its strategy. The Japanese firm will exit the mass market to focus on the premium segment.

The move confirms the company’s exit from the commuter bike segment, where it was selling the Hayate 112cc bike. It discontinued the sale of Hayate in the domestic market a while ago though it produces the model in small numbers for some export markets. The commuter segment — 110cc and below — accounted for 62 per cent of the Indian motorcycle market in 2018-19.

“In bikes, we will focus on above-150cc, and in scooters, it will be above-125cc products. We have no plans of getting into smaller cc bikes or scooters,” Koichiro Hirao, Company Head, SMIPL, told BusinessLine.

The starting range for the brand in motorcycles now is the Gixxer 155 cc bike. “We intend to be a premium player,” said Devashish Handa, Vice President - Sales, Marketing and After Sales, SMIPL. “Our scooters are at a slight premium. In motorcycles, our premium appeal is a little more significant. We have decided not to be on the utility product side, but would be more on the lifestyle and passion product side.”

Customer preference

The shift was necessitated by the growing customer preference for bigger cc bikes over the past few years, said Handa. The share of commuter products has been shrinking. “As disposable incomes grow, people are preferring premium products as they are able to afford them. So we intend to go along with the trend,” he added.

Rural upgrade

Since the rural market is all about commuter bikes, is Suzuki ignoring it? “We will wait for them to upgrade. Disposable incomes are growing in rural areas, too, and hence we hope higher cc bikes will find acceptance in such markets gradually,” said Handa.

In scooters, the company’s strategy has paid dividends. Suzuki is the fastest growing scooter brand in India with a double digit increase in monthly sales, supported by its 125cc Access, which is the third largest scooter brand after Honda Activa and TVS Motor Jupiter.

In scooters, a shift towards 125cc models is clearly seen with growing sales of the segment and numerous launches in the pipeline.

Meanwhile, Suzuki plans to double its bike sales target helped by new launches and improved customer experience at dealerships with a new premium appeal.

In FY19, it sold a little over 53,000 units of motorcycles (against 79,700 units in FY18) and aims to double the volumes by the end of this fiscal with new launches including the Gixxer SF and Gixxer SF 250.

This fiscal, it targets total sales of 9.7 lakh units including 8.6 lakh units in the domestic market and 1.1 lakh units via exports. The contribution of bikes is seen at 12 per cent, up from 8 per cent in FY19.

 

 

Published on June 07, 2019

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