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CFMoto kickstarts bike foray

Murali Gopalan | Updated on November 28, 2019 Published on November 28, 2019

Once BS-VI emission norms come into force, from April 2020, CFMoto plans to launch one motorcycle from its stable every quarter for the next three years

Chinese brand will take on established local and Japanese players

It is during the course of a telephone interview that Kenneth Chen remarks that India is a market that is growing “very fiercely”. The reference is to the two-wheeler industry where his company, CFMoto from China, is the latest entrant.

In his capacity as Assistant GM of Global Sales, Chen knows only too well that it is going to be a tough haul ahead in the world’s largest two-wheeler market with annual production numbers of over 21 million units.

It is also a country where there are strong local players like Hero, TVS, Bajaj and Royal Enfield in addition to a formidable Japanese brand like Honda with counterparts Suzuki and Yamaha following some way behind. So, how does an unknown Chinese brand fit into this scheme of things?

Technology is critical

“Technology is the critical point,” replies Chen, a clear reference to the fact that this will be the key differentiator at the end of the day. It is technology, he asserts, that CFMoto will be banking on to take its India story to the next level in the coming years.

For now, the company has barely kicked off its innings with the inauguration of a showroom near Mumbai and four motorcycles (one 300cc and a trio of 650cc models) with prices ranging from ₹2.3 to ₹5.50 lakh. More showrooms will follow in due course as the bikes make their way across India. The models are assembled at a facility in Bengaluru as part of an alliance with Anvita AutoTech Works represented by its CEO, Vamsi Krishna Jagini. Chen is clearly excited about the road ahead while he admits that it is going to take a lot of hard work to be able to make an impact.

What is interesting about CFMoto is that it has an alliance back home in China with KTM of Austria which, in turn, is part of the Bajaj Auto portfolio. Bajaj owns 48 per cent of KTM and manufactures the Duke motorcycle range from 125cc-400cc at its Chakan plant near Pune. These are retailed in India across the 500-odd KTM outlets and also exported to other parts of the world.

What is even more interesting is that KTM had acquired the Husqvarna brand from BMW Motorrad five years ago and will farm out production of select models to the Chakan facility. This exercise will kick off in the coming months and, as in the case of KTM, the Husqvarna brand will also make its way overseas from Chakan.

Brand identity

CFMoto will, however, build on its own brand identity in India. “We are well known as a motorcycle manufacturer in China and because of the technology and experience with KTM, we are quite upbeat,” says Chen. This will also mean access to technology from its Austrian ally as well as inputs in styling and design as well as “more ideas and innovation”. It was at the 2017 EICMA motorcycle show in Milan that Stefan Pierer, CEO of KTM, told this writer that the joint venture CFMoto would see the commissioning of a new facility to produce bikes both for China and developed countries.

“This is part of a larger strategy given that we already have a good relationship with CFMoto,” Pierer had said. The annual numbers were expected to be 50,000 units. The 790 Duke unveiled at EICMA then (which recently made its India debut) was earmarked as being part of the line-up for China and other markets.

“China could become an interesting developed market, which is heading towards an Europe-like model for 500cc-700cc bikes,” added Pierer. Some components for the 790 Duke unveiled at EICMA 2017 were already being sourced from Indian suppliers even while its first stop was China. Likewise, Chakan gets components from China for the existing Duke family that are, in turn, distributed across the world. “China is becoming an important supplier base for us and that means many things are possible,” said Pierer. Going forward, the KTM global strategy will clearly revolve around its base in Austria as well as India and China.

Getting back to the CFMoto India story, Vamsi Krishna Jagini chips in to say that it is the leading two-wheeler brand in China with a range of bikes from 150cc-1200cc. “Our idea is to get the entire range in phases,” says the CEO of Anvita AutoTech Works.

BS-VI vehicle plans

According to him, once BS-VI emission norms come into force, from April 2020, the plans are to launch one motorcycle from the CFMoto stable every quarter here for the next three years. This will kick off with 400cc bikes, followed by 700cc and 800cc.

Jagini says if the script goes according to plan and volumes grow substantially, the partners would consider setting up a full-fledged manufacturing facility. At present, nearly 50 motorcycles are assembled everyday, which translates into an annual output of 15,000 units. Even if the idea of a manufacturing plant fructifies, it is still a good three years away and the objective right now is to build the CFMoto brand. According to Jagini, the new plant could be located either in Bengaluru or Pune since the top priority is to ensure that a robust supplier base is in place to ensure localisation and competitive pricing in the process. The plant will also pave the way for CFMoto’s all-terrain vehicles as well as 150cc motorcycles which can be part of the mass commuter segment.

“We are planning to export bikes to Nepal and are in discussions right now. Once production begins, we will look at Africa based on talks with CFMoto,” says Jagini. The ASEAN region will not be part of the export plan and this is perhaps because CFMoto ships out bikes directly from China to countries like Thailand, Singapore and Malaysia which are covered by free trade agreements.

Jagini is confident that Indian customers will react favourably to a Chinese brand even while it is still a stranger in a market dominated by Indian and Japanese players. “At the end of the day, buyers here want a good product and price with good technology. CFMoto has everything in place with the best machine/features and is more technically advanced than any other motorcycle in this space,” he says. Additionally, reiterates Jagini, the company understands the importance of localisation as well as “understanding customer mentality” which explains why “we are able to offer competitive pricing”. All these inputs were part of the market research for India when the partners realised that “value-for-money and the best product” were important considerations for buyers.

“We were all aware that Japanese products are very well settled in the market. We also know there will be multiple reactions to a Chinese product but a test ride will tell you that the product conforms to global standards,” insists Jagini.

‘Global’ bike

Consequently, it is his belief that the Indian customer will not “look at it as a Chinese product” but a motorcycle that is truly global. Chen also reminds you that with KTM being an established brand in India, this will become an added advantage for KTM. “With today’s knowledge levels, this association (with KTM) will give more confidence to customers. However, if the product speaks for itself, this is good enough and we do not want to stress on KTM alone,” he says.

Chen also drives home the point that India marks a big foray overseas for CFMoto by virtue of the fact that it is the world’s largest two-wheeler market. ”We may have some disadvantages in that there are familiar models (from established players) but what we are focusing on is a beautiful price with good marketing/service to let people know that there is a new Chinese manufacturer,” says Chen. This is again where the KTM association in China will play a role in terms of “bringing more technology and quality to the customer”. CFMoto is also working on an electric programme which will be launched globally.

“For now, it is in the hands of R&D and is confidential,” says Chen. The scope of this electric initiative includes bicycles, motorcycles and scooters and work is going on in full swing right now. According to Jagini, India could also be home to this array of products from CFMoto, and across fuel options, if things go according to plan.

Published on November 28, 2019
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