Marketshare Shifts in the Two-Wheeler Market

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Last week, someone pointed out that we had missed out on a critical marketshare update on the Indian two-wheeler market. We hadn’t done that intentionally. The EMMAAA analysts were busy preparing the January update for their ten-year model level forecast of the Indian two-wheeler industry and market. Click here to subscribe and download the same instantaneously.

With the 2014 two-wheeler sales data now crunched into the forecast, we were able to sit down and analyse how each important segment behaved in 2014. We also ran a marketshare analysis for all segments to analyse how individual OEMs performed in 2013.

 

SCOOTERS

This segment has been the darling of the industry over the last few years. Scooters have grown the fastest in the market and 2014 was no different. The overall Scooter market grew by 28.89%. That’s awesome whichever way you look at it. This would become even more awesome when we start dissecting Motorcycle segments one by one and realise that nothing even comes close to Scooters in terms of growth numbers.
Amongst the players, Honda Motorcycles & Scooters India (HMSI) had a 51.13% share of the market in 2013. At the end of the year 2014, HMSI had managed to improve it to 54.79%, an absolute growth of 3.66%. Again, the Active and Aviator range helped HMSI gain.

Scooters 2013 vs 2014

Most of the market share was lost by Hero MotoCorp, which saw its marketshare decline to 16.86% in 2014, from 19.86% in 2013, an absolute loss of 3.00%. Considering the Pleasure is mechanically similar to the Honda Activa, Hero needs to look at why customers are moving to Honda. It is also an indication that Hero may be stronger in the interiors while Honda has emerged as the stronger brand in the big cities.

TVS was also a big gainer – the company saw its marketshare improve from 12.5% in 2013 to 15.09% in 2014, a gain of 2.59%. The other gainer was Yamaha whose marketshare jumped by 89 basis points, from 4.51% to 5.3%.

However, the other small players in the segment – Suzuki, Mahindra and Piaggio – bled marketshare.

Suzuki saw sales decline and its marketshare came down from 9.17% to 6.51% in the year. The Japanese manufacturer needs to take a hard look at its India strategy as after Motorcycles, where it never did well, it is now even faltering in Scooters.

Mahindra also saw a decline in sales and market share. The company’s share of the market came down to 0.83%, from 1.67% a year ago.

Piaggio’s focus on premium scooters is on shaky grounds. While 2013 was good, 2014 was extremely bad. Sales declined and marketshare was down to 0.62%, from 1.16% in 2013. This was in the face of the company launching multiple new products in the year.

 

MOTORCYCLES (75CC – 110CC)

Traditionally this is the biggest segment in the Indian two wheeler market and the reason why Hero towers over everyone else in the industry. The segment accounted for 6.64 million units in 2013 and this had improved to just about 6.96 million units in 2014. Growing from such a huge base is always tough and one must look at things from an absolute gains perspective. Overall, the segment accounted for a gain of 313,000 units, the best gains for any segment not called Scooters. On a percentage basis, the segment grew by 4.7% this year.

75cc-110cc 2013 vs 2014

Within the segment, Hero MotoCorp has everyone for breakfast, lunch and dinner. The manufacturer accounted for 66.53% share of the segment in 2013. In 2014, Hero managed to improve it to 68.91%, an absolute gain of 2.38%. They sold nearly 4.8 million motorcycles in this segment, an awesome figure by itself. That they managed to improve over their previous year’s market share is even better.

Honda wants to catch up to Hero and this segment is critical for that. The improved its marketshare from 7.99% to 9.06% in 2014, an absolute gain of 1.07% in the year. That’s still much slower than Hero and not many in Manesar would be happy.

TVS also improved its share of the segment from 5.22% to 5.88% in the year while Mahindra, riding on the Centuro, managed a 2.28% market share, a gain of 0.7%.

Most of these gains came from the marketshare losses for Bajaj Auto. The company lost a whopping 4.65% share of the market as its volumes declined. In 2013, Bajaj had accounted for 18.04% share of the market and this came down to 13.39% in 2014. The Bajaj range of Platina and Discover 100 in the segment is inadequate and the company needs fresh products soon to manage the market share erosion.

The other manufacturer in the segment which managed to lose market share was Yamaha. With the product onslaught from Honda and the strong foothold of Hero in the segment, not many buyers look at the Crux range, however good the product may be. Again, like Bajaj, Yamaha needs to look at if they really want to be fighting in the segment at all.

 

MOTORCYCLES (110CC-125CC)

If Bajaj Auto lost some marketshare in the segment below this, it was a complete massacre in this segment as the company managed to lose 7.21% share of the market, its marketshare falling from 15.52% in 2013 to 8.31% in 2014. Again, the Discover range hasn’t worked for them even though they introduced a mind-boggling number of variants in 2014.

Hero managed to retain its share of the market and ended the year with 40.62% share in the segment, up slightly from the 0.23% in 2013.

110cc - 125cc 2013 vs 2014

Suzuki has two products in the segment – Hayate and SlingShot – and had a bad year as sales halved. The company also halved its marketshare from 3.24% in 2013 to 1.62% in 2014.

TVS has little to offer in the segment and that reflects in the numbers. The manufacturer lost sales volumes and saw its market share decline from 5.04% in 2013 to 2.87% in 2014, an absolute drop of 2.17%.

Now all of the above losses in market share were gobbled up by HMSI. The Honda brand accounted for 893,810 units in the segment in 2014, a marketshare of 45.94%, up from 34.97% in 2013, a gain of nearly 11%. In doing so, it unseated Hero as the leader in the segment. Most of Honda’s gains came from the Shine, the most popular bike in the 125cc segment.

If the market shifts from 100cc towards 125cc, it would be a gain for Honda feel EMMAAA’s analysts. That is what EMMAAA’s Average Motorcycle Engine Displacement Index (AMEDI) forecast, part of the ten-year, model-level forecast of the Indian two-wheeler market also indicates.

However, 2014 was a move in the opposite direction (eat that analysts) and the 110cc-125cc segment grew by only 0.24%. In absolute numbers, this was a gain of ONLY 4643 units.

We will have a detailed look at the AMEDI forecast in our analysis on Thursday and examine why the forecast is critical for automotive component suppliers.

 

MOTORCYCLES (125CC – 150CC)

If Bajaj has been getting is ass whooped in the lower segment, it really lays the smack down in the higher engine size segments. It’s a pity that the higher engine size segments account for so little of the market. Still, the market is moving upwards in average engine sizes, feel EMMAAA and Bajaj may now something that the others may not.

In 2014, the company gained a 4.52% share of the segment, growing its marketshare form 41.35% in 2013 to 45.87% in 2014. The Pulsars (135cc and 150cc) are well received in the market as they provide a cost efficient gateway to the sports bike segment. Bajaj is strengthening its presence with the Discover 150 range launched in 2014.

125cc - 150cc 2013 vs 2014

Most of Bajaj’s gains were submitted by Hero and Honda. Hero lost 3.71% share of the segment while HMSI lost 2.17%. At just above 100,000 units, Hero ha snow become a marginal player in the segment and badly needs more products to improve its offering.

Apart from Bajaj Auto, the other significant gainer was Yamaha which improved its share in the segment by 1.46% to 23.48% in 2014.

 

MOTORCYCLES (150CC – 250CC)

The range encompasses two segments as defined by SIAM – 150cc to 200cc and 200cc to 250cc. The segment is dominated by Bajaj Auto with its Pulsar / KTM range and TVS with its Apache. Everyone else is just the applauding audience. Also, low overall volumes in these segments, combined with its urban appeal, mean that a new entrant has a much better chance of unsettling the applecart.

The segment s also hold a lot of promise, being one of the fastest growing segments with relatively meaty volumes. Overall, the two segments accounted for a little more than 460,000 units in 2014, a growth of 24.22% over 2013 dispatches of 370849 units.

150cc - 250cc 2013 vs 2014

In 2014, Bajaj, despite a product onslaught, managed to lose market share in the segment to TVS, which had no new product introductions worth talking about. Bajaj saw its market share come down from 50.36% in 2013 to 46.94% in 2014, an absolute loss of 3.42%.

The other big loser was Hero MotoCorp which saw Karizma sales decline significantly and lost 5.15% share of the segment.

Most of the gains were made by TVS and Suzuki. While TVS improved its share of the two segments to 41.4%, from 35.67% in 2013, Suzuki was a new entrant in the segment with the Gixxer and managed to end the year with a 4.48% share. We see a significant improvement in Suzuki’s market share in the segment in 2015, just about the only piece of optimism we have for the brand.

Box: With most manufacturers replacing 150cc motorcycles with 160cc ones, we see a serious upheaval in market share for leading players in the 125cc — 150cc segment and the 150cc — 200cc segments. With the Unicorn 160 being added to the Honda portfolio, Suzuki already exiting the lower segment and moving the Gixxer above 150cc and Bajaj mulling a 160cc replacement for the Pulsar 150, market shares in the SIAM B4 and B5 segments would be a bit topsy turvy going forward.

 

BIG BIKE SEGMENTS

EMMAAA takes a keen interest in Big Bikes (>250cc) as these SIAM segments, even though niche, account for some heady growth numbers. From a modest base of less than 200,000 units, the segment grew by 74.4% in 2014.

Above 250cc 2013 vs 2014

Even though the number of models are quite large, most of the Big Bike market is accounted for by Royal Enfield. The Bikes-we-demand-a-government-subsidy-for (import brands) part of the market is dominated by Harley-Davidson, even though Triumph made some serious inroads in 2014. The Japs are yet to wake up and smell the coffee in this part of the market.

WITH HERO, HONDA, BAJAJ AND TVS DOMINATING THE INDIAN TWO-WHEELER SPACE, WE LOOK AT THE SMALLER PLAYERS AND ANY FUTURE THEY HAVE, COMING UP IN TOMORROW’S ANALYSIS. 

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