Benelli drafts aggressive business plan for India in Round 2

On the face of it, this is an unconventional alliance. But Dante Bustos thinks otherwise.

“Choosing a partner is about relationships and it is not about a big or small wallet. People are important to help identify the opportunities,” says the Chief Marketing Officer (Global) of Benelli. The reference is to Adishwar Auto Ride India — Mahavir Group, the well known auto dealer based in Hyderabad, which will now team up with the Italian bike brand. Prior to this, Benelli was in a partnership with the Pune-based DSK Group, which ended recently leaving dealers high and dry.

Vikas Jhabakh, Managing Director of Benelli India (and representing the Mahavir Group), is upbeat about the new alliance. “As partner, we are now their bridge to India. We became dealers for Benelli over three years ago. Obviously, it is a larger role now and we want to take this brand to a national level,” he says.

Rich auto experience

Jhabakh bases his optimism on the fact that Mahavir has been in the auto business for 30 years. Founded by his father who is chairman of the company, it kicked off as a travel agency and has grown since then.

“We have had humble origins and today retail brands from Skoda, Mercedes Benz and Isuzu,” he says. Mahavir was actually Isuzu’s first dealer in the country while Mercedes and Skoda have been partners for two decades on an average.

From Jhabakh’s point of view, this new foray presents a unique growth opportunity for Mahavir. “After 30 years of being a travel agency and into auto retail, this is a chance for us to get into assembly and hopefully manufacturing with a huge brand. This is the second generation coming into the business and I have three younger brothers as well who are super excited and looking forward to this,” he says.

Did the parting of ways with DSK affect the Benelli brand in India? “We never left but have had our share of issues and worked hard to solve them. As a result, it is better than before in terms of planning for the new brand in India,” insists Bustos.

New story begins

The revised business model will now see moving over from a “simple distribution agreement” to an assembly project with the possibility of further integration “in a very short time”. This would mean local manufacturing while contemplating exports to parts of Asia, Europe and Latin America.

Jhabakh admits that with Benelli out of the market for nearly three months now, all dealers including Mahavir that had invested in the brand were stretched to the limit. Customers were equally doubtful about the brand and its comeback prospects. “We spoke to all our investors to understand the situation and shared with them what is in store for the next one to three years. They deserved an explanation and we reassured them that the plans were aggressive,” he says.

As a result, 90 per cent of dealers have decided to keep their facilities going despite not having bikes for some months. As Jhabakh reasons, they obviously see value and have faith in the Benelli brand. “We have begun supply of spare parts to all the dealers across the country,” he says.

The bikes will be brought back to the showrooms by October and the entire team is “literally working 24x7” on this effort. According to Jhabakh, some have even relocated temporarily from their homes clearly indicating that they are all emotionally connected to Benelli and want it to become a household name as their shared vision.

“Everybody knows a Harley or Ducati and we also want to get there. I am sure that will follow and it is this shared vision and many sacrifices by the team that will make it happen,” he says. The plan is to add 40 touch points in phases over the next two years, which means there will be 60 in place by 2020.

Learning from the past

Bustos says the first three years with DSK were a period of intense learning for Benelli. “We are aware of the problems we have had in the past where we did not work much with end-users. We need to improve a lot of aspects and the key is to now work on the bad things,” he says.

And what are these ‘bad things’? According to Bustos, the first relates to communication to users. “Benelli is not an arrogant brand as we listen to customers carefully and try to solve problems quickly. In the past, perhaps the communication with end users in India was not that much and we have received a lot of complaints,” he says.

To remedy this, the company has now planned a campaign to identify all these users and make sure there is direct communication with the factory and dealer. The other ‘bad thing’ is that the market for Benelli is not very good in terms of spare parts supply and work is now underway to develop new channels either from the factory to customer directly or from the factory to dealer and customer.

“In both cases, we will make a big improvement in the way we deliver spares to users and are working hard to come up with a solution,” says Bustos.

MoU with Telangana

Benelli has signed an MoU with the Telangana government to have a three-acre assembly plant in Hyderabad. Production will kick off in October and full scale output will see nearly 10,000 bikes roll out every year.

According to Jhabakh, a task team has been set up to study the possibility of localisation as well as a manufacturing/R&D facility in 12 months if things go according to plan. “It could be as quick as six to 12 months or as long as 18 months because we are talking of sizeable investments,” he says.

Benelli is only too aware of the fact that the Indian customer is “very concerned about price”, which fits in well with its objective as a premium affordable brand. “This is our core strategy worldwide and this year will see us introduce more models into the market aggressively,” says Bustos.

Growing the riding culture

In Jhabakh’s view, Benelli is just not looking at making products but also keenly observing the ecosystem and lifestyle around its offerings. “They understand that each product family appeals to a certain kind of customer with the corresponding lifestyle and ecosystem. This will include experience in the showroom, riding groups, technology and connectivity,” he says.

Consequently, Mahavir will explore all options including new kinds of dealerships and service apart from other initiatives like riding gear/groups. According to Jhabakh, a lot of Benelli buyers are first time buyers who have come into 300 cc bikes from 125 cc bikes.

“They need to be part of a riding culture that includes safety and so on. We have teams for all of this and the idea is to integrate all this to give a different customer experience,” he says.

“We see this as a fantastic opportunity to get going again. We know what customers want and are keen on being a transparent company. The top priority is to establish the trust in the market before going flat out and launching a slew of products,” declares Bustos.

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