Chinese companies do not seem to pose any sizeable threat to Indian two-wheeler makers, at least on the home turf.
According to analysts, Indian customers’ demanding attitude and an overall competitive environment has put up virtual barriers for Chinese two-wheeler makers to make their India foray successful.
Pramod Kumar and Mitakshi Ashar, analysts with JM Financial, ina recent note said incumbent players (i.e. Indian companies) offer superior products at competitive prices, which these (Chinese) players have been unable to do so far.
“Companies such as Hyosung Group of Korea and SYM of Taiwan have attempted in vain to make a mark in the Indian market. Even the much hyped Mahabharata Motors, a joint venture between Universal Group of India and Indonesia’s Salim Group, has not been able to attract buyers,” they said.
But when it comes to global sales, Indians still have a long way to go - 7 out of 10 two-wheelers sold in the world are still made in China. Though Indian companies have already begun taking the fight with Chinese manufacturers to the global arena, a lot remains to be done to succeed here.
Take the case of Bajaj Auto, which has already launched a low-cost motorcycle in Nigeria. This bike has been manufactured in China, using Chinese supplier base and aims to dent Chinese companies’ share in the “bottom of the pyramid” segment, where price is less than $1000 and Chinese bikes dominate.
Industry estimates say Chinese brands account for almost two-thirds of the 21 million unit low priced bike segment spread across China and African countries (primarily Nigeria) at present. Will Bajaj be able to wrest market share from these companies remains to be seen.
Even TVS Motor Co is expanding its export footprint in places such as Latin America in a bid to strengthen its grip on global two-wheeler industry.
Kumar and Ashar said India compares poorly among emerging markets in terms of two-wheeler penetration, but with rising incomes this is set to improve.
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