With the new 110cc bike, Mahindra Two Wheelers, India’s youngest player in
two-wheelers, is confident it can woo buyers and realise the Group’s ‘right to win’ philosophy. SumantraBarooah delves into the strategy.
Mahindra & Mahindra has practically started a new journey in the two-wheeler business with the launch of the Centuro – the new 106.7cc bike – which falls into the most competitive part of the motorcycle market. The Centuro is the ‘first’ of a series of ‘astonishing products’, the company said at the Jaipur launch of the bike on July 1.
While the company has a less premium Pantero bike (seen as a reworked Stallio), it is the Centuro with which it hopes to grab a slice of the entry-level segment. The Stallio was Mahindra Two Wheelers’ first motorcycle in 2010 but the product was recalled in 2011 due to several technical problems.
In an attempt to achieve that winning streak in the marketplace, the company tapped into synergies with its other mobility businesses. For example, the Centuro offers features and frills like an engine immobiliser, distance-to-empty indicator, flip key and follow-me-home lamps found in Mahindra SUVs. In the cut-throat commuter segment where the Centuro meets some formidable competitors from Hero MotoCorp, Bajaj Auto and Honda, it hopes to be able to woo more customers with a few bells and whistles.
For the customer base to increase, the reach of its sales network will be key. Therefore, Mahindra Two Wheelers plans to expand its existing network of 450 dealers and 600 touchpoints across the country to 1,000 touchpoints in 6-8 months
Its network currently addresses 75-80 percent of the total two-wheeler market. To further expand its reach, it is looking to leverage its network of tractor dealers. This would give it access to customers in small towns and rural areas. “The tractor dealer network is bigger than any two-wheeler network,” asserts VirenPopli, executive vice-president, Mahindra Two Wheelers.
Aiming for 10 new products in 25 months
The Centuro marks the beginning of a new chapter for the company, which was built on assets acquired with the acquisition of Kinetic Motor Company in 2008. Over the next 3-5 years, the company plans to launch a range so that it can be considered a ‘credible player’. No less than 10 new products, including variants of existing models, are planned over 25 months. “Our R&D team is working feverishly on a slew of launches,” reveals Anoop Mathur, president – Two-Wheeler Sector, M&M.
The range of products covers various segments and applications. The 180-member-strong R&D team is working on the new projects. The next product will be a scooter variant with a stop-start fuel saving feature. Is an off-road bike likely? Mathur hints at that but it won’t be in a hurry, given that the business is still in its early days.
But for now, the focus is to ensure the success of the Centuro, which has a retail tag of Rs 45,000 (ex-showroom, Delhi) and takes on Hero’s Passion Pro and Honda’s Dream Yuga. It falls in a segment that sells around 150,000 units a month. To woo customers, Mahindra Two Wheelers is offering the Centuro for Rs 44,000, a thousand rupees less than its regular price, to the first 10,000 customers. The Centuro promises an ARAI-certified mileage of 85.4 kilometres per litre.
India’s overall two-wheeler market is going through a slowdown with most segments showing no growth and some declining. The segment fell by under one percent in 2012-13, according to SIAM figures. But all eyes are on a likely festive season uptick. “There will be postponements in purchase. Some may even downgrade their choice of product due to economic reasons,” says Popli.
The going has not been easy thus far for Mahindra Two Wheelers. For 2012-13, it accounted for 0.76 percent of the market as against one percent in 2011-12, according to SIAM data. Sales for 2012-13 were about 105,537 units as against 134,518 units in the previous fiscal. The company will now hope that with the Centuro, it will build a base to ensure a sustainable ride in the long term.
Since its buyout of Kinetic Motor in 2008, Mahindra Two Wheelers continues to invest in the business. In an analysts meet last year, Anand Mahindra, chairman, Mahindra Group, had said that he will not hesitate to exit a loss-making business. The two-wheeler business is not the one yet. “You get out of a business when you no longer believe you have a right to win,” says Mahindra. Given the plans it has and the optimism of its core team, M&M is far from calling it quits now; instead, it is aiming at success with the beginner’s enthusiasm.
The first attempt in the bike segment – the 110cc Stallio – was a ‘khichdi’ of technology and sourcing. What Mahindra wants everybody to see is how efficiently the business picks itself up and showcases the ‘Rise’ philosophy of the Group.
A solid responsibility for the core team at Mahindra Two Wheelers to deliver. More so as the company prepares to up the ante with the 300cc Mojo motorcycle by FY14
(Inputs from Amit Panday)