New Delhi:
Suzuki Motor Corporation, the parent company of Suzuki Motorcycle India Pvt Ltd (SMIPL), has decided to make India the export hub for the 125cc-300cc motorcycles for the world market.“From the number of units standpoint, we are already the most significant one for Suzuki Motor Corporation. Last year, our headquarter decided that Suzuki Motorcycles India would be the mother plant for all small capacity (125-250 or 300cc) motorcycles. Some of the work in this direction started last year and significant action will take place this year,” Devashish Handa, Executive Vice President, Suzuki Motorcycle India, told ETAuto in a virtual interaction on Friday.
In the past one year, the company’s exports have grown by 2X to over 1,45,000 units, and even this year it is expecting to clock the same growth momentum along with sustaining the sales.
Currently, the maker of Gixxer motorcycles exports to destinations like the SAARC countries, Latin America, ASEAN, Africa and even its home country Japan.
“We are not catering to price point-driven markets, we intend to supply premium motorcycles to more evolved markets like South Africa, New Zealand, and Taiwan,” he said.
The two-wheeler maker, which sold about 754,938 units in the overall market in the current fiscal year, said it has a capacity of over a million units in its production facility in Gurugram (Haryana).
With aggressive plans on production, Handa said that the two- wheeler maker is working on managing its production. However, he did not clarify if it will be a new facility or the expansion of the present plant. “Had the semiconductor issue not impacted us, we would have been struggling with the installed capacity last year. We are cautiously optimistic, but since the semiconductor issue is continuing, our installed capacity should suffice for the moment,” he said with reference to 2022.
Retail strategy for Indian motorcycle market
In the Indian two-wheeler industry, scooters make up about 30% of total volumes, followed by about 50% by commuter motorcycles, and the balance 20% by premium motorcycles.
Unlike what its name suggests, Suzuki Motorcycles India, clocks about 94% of its volumes from scooters in the country. However, the case in point is quite the opposite in the global market where the company’s motorcycles are in higher demand than scooters.
Handa candidly said, “We are thinking of justifying our name here,” while adding, “We have no plans to enter the commuter segment in the Indian motorcycle market. Our core strength has been performance motorcycles so we will make our mark in that category. The growth story on the scooter side will also continue but it will not be in the product portfolio expansion, rather to consolidate our position on geographical footprint.
“If things go well, by the next two years, we should have 6% market share in the segment.”
The two-wheeler maker has already started reorienting and establishing exclusive motorcycle dealerships in India, which will cater to the entire range of motorcycle portfolio. These dealerships will not include its scooter range, unlike regular dealerships. “Last year in November, we started with opening in Delhi, followed by Bengaluru, Pune, and Mumbai. We will expand to more cities soon.”
On the EV front, Handa said that the company has the technology, but it is not bullish on being the first mover. “There is work going on, but not yet decided on the commercialisation.”
Sales outlook for 2022
As per the industry figures out so far, Suzuki motorcycle said it is the only two-wheeler maker clocking a double-digit growth of 17% in the domestic market.
According to Handa, the company’s production has been trailing the demand by 15%-20% every month, mainly due to semiconductor shortage, through the past year. However, the market should start reviving in 2022, but will not happen at a sharp rate but gradually.
“The recovery will happen from the urban to rural side, because so far we do not have signs of any strong stimulus which would lead to agri-led demand.” However, given the current situation, the company also expects the semiconductor shortage to continue for the calendar year 2022.
Following the increase in commodity prices, Handa said that the two-wheeler prices are expected to be increased in April. For Suzuki motorcycles, the price hike will be roughly about 1%-2.5% across the range.
The company sells Intruder, Gixxer motorcycles and superbikes like Hayabusa, V-Strom 650 in the country. Its range of scooters include Access 125, Avenis and Burgman Street.
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The price revision has been necessitated to partially offset the impact of increasing commodity prices, the company said.
