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Suzuki gears up for two-wheeler comeback

Murali Gopalan | Updated on January 08, 2018

Eyeing big The company has targeted sales of five lakh units by the end of this fiscal

New plant and renewed focus on premium bikes, scooters will lead the way

At one level, it is hard to believe that Suzuki has been part of the Indian two-wheeler landscape since the early 1980s. This long tenure is in sharp contrast to its minuscule presence, a reality that the company is only too aware of and keen on setting right in the coming years.

This will include a far more focussed product strategy, which will confine itself to scooters and premium motorcycles in the 150cc plus space. Work is also underway to scout for a second plant, which will, in all likelihood, be set up in the South by 2020.

At present, Suzuki Motorcycle India operates out of a facility in Gurugram near Delhi, which has an optimal capacity of one million units. The company has targeted sales of five lakh units by the end of this fiscal, going up to seven lakh by FY’19 and finally a million units by 2020.

By this time, it will need a second plant and all Managing Director, Satoshi Uchida, is willing to say at this point in time is that the West and South are the likely contenders. Of the two, the South perhaps makes more sense since it is Suzuki’s largest market and offers better logistical support. No decision has been made yet, though, and a final confirmation could come by the end of this fiscal.

Challenges ahead

However, there are bigger challenges in store, especially from the viewpoint of market share where Suzuki remains a marginal player compared to the likes of Hero Motor Corp and Honda, which clock over six million units annually. Former ally, TVS Motor and Bajaj Auto are also way ahead while Yamaha is already inching towards the one million unit mark.

“I am not discouraged but we clearly have to change our approach,” says Uchida. “This is a young market with tremendous potential. There are a host of brands and the scooter segment is booming.”

His colleague, Sajeev Rajasekharan (EVP – Sales & Marketing) adds that the decision to focus on premium bikes and scooters essentially means that Suzuki will participate in half of the overall two-wheeler market. It will steer clear of commuter motorcycles, a segment where Hero rules the roost.

“We cannot compete with Hero,” says Uchida. “It is clear that we will not be able to make it in the mass segment and would rather focus on premium motorcycles, which is our strength.” The objective is to give customers a good reason to choose the Suzuki brand, which, hopefully, will stand out as a superior option in this space.

The success of the 125cc Access scooter has been welcome news too. Rajasekharan says that it scores over 100/110cc scooters in terms of mileage, space, comfort and power. “The need of the hour is to ramp up our network and put in place the right systems and processes to make a difference,” he says.

Careful planning

The strategy will see Suzuki being far more selective about the markets it plans to grow in. Given that it will now focus solely on scooters and premium bikes, it will only opt for dealerships in those regions, which clock sales of at least 1,000 units each month in these two product categories.

“We will not go on the rampage and even there is a market, which sells 2,000 two-wheelers but less than 1,000 premium bikes and scooters, we will steer clear of that space,” reiterates Rajasekharan. The idea is to ensure that dealers do not suffer and their business remains viable.

Markets such as Kozhikode have been happy hunting grounds for Suzuki where it has a 30 per cent share thanks to the Access. Bengaluru, likewise, is a double digit market riding on the scooter momentum. “We don’t think it is too late to make a difference even if we have lost valuable time over the years,” says Rajasekharan.

Suzuki’s optimism stems from the fact that India’s younger generation of buyers are far more open to buying a good at a competitive price and are not really concerned about legacy issues. In the process, it would only be a matter of time before word spreads and more people queue up at showrooms.

“If we are true to our cause and offer the best, there is no reason why the customer should not gravitate towards us,” says Uchida. He also believes that rising income levels will also lead to more spending and it is important, therefore, for manufacturers to offer a wide choice of products.

“Between now and 2020, we will perhaps have more scooters in our lineup but will not ignore premium motorcycles,” says Kenji Hirozawa, EVP – Sales & After-Sales. “With better infrastructure and more women riders, we see greater potential for scooters.”

Suzuki is also upbeat about its prospects in the Bharat Stage VI era when new emission norms come into force from April 2020. The move to fuel injection will mean additional costs on technology but the company is reasonably confident that it can rise to the challenge with greater efforts at localisation.

Global hub

“By 2020, our India operations will also become a global hub for Suzuki two-wheelers and models produced here will be exported to a host of other countries,” says Uchida. This will also coincide with more R&D work happening out of India even as Japan farms out more responsibilities to the world’s largest two-wheeler producing nation.

The new state-of-the-art plant, which will become a reality by 2020, will play a big role in this global vision. This is where access to the port becomes critical for export shipments. This facility could perhaps see the first electric two-wheeler from Suzuki too sometime in the not-so-distant future.

The Japanese automaker will be hoping that the comeback script works according to plan and it can prove a point in this intensely competitive two-wheeler market. It will, of course, be a tall order to try and replicate the car success story powered by Maruti but a strong statement in scooters and premium bikes will be more than welcome.

Published on October 12, 2017

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