Motoroyale, the Kinetic Group’s multi-brand premium motorcycle division, has revealed its aggressive plan to tap the high-end motorcycle segment in India. The company is optimistic about taking charge in the country's premium bike segment. Ambitious move? Let’s see
Motoroyale ventured into the premium motorcycle segment by launching MV Agusta's first product in 2016. In 2017, the company inked a JV with British marque Norton Motorcycles for localising content and selling the superbikes in India. The company today launched seven new bikes from 5 brands, taking its total portfolio to 9 products between 250cc to 1,000cc, and retailing from Rs 300,000 to Rs 60 lakh.
Speaking at the sidelines of the launch with Autocar Professional, Ajinkya Firodia, managing director, Motoroyale (pictured below), said, "From a team of seven people in the last two months, we are now a 25-member team. We have got all these bikes, the team have all gone abroad and have got trained. The priority was to launch these products; we could have launched them in a phased manner, but that is more painstaking."
"We have launched them all together, calculated the potential of all the brands, which goes to around 2,500 units. Of these, 1,500-1,600 units are already an existing market for Hyosung, the balance are the new bikes. It is definitely possible to do it if we do it right," added Firodia.
New plant in the offing
Interestingly, Firodia says the company is currently assembling the motorcycles at the Ahmednagar plant in Kinetic Engineering, which is on a rental basis. Production capacity is pegged to be around 30,000 units.
Firodia reveals that the company will soon move out to a new Motoroyale-owned facility, which will have a manufacturing capacity of 80,000 units. "We have commonised a lot of those lines. It coincidentally happened that through our industralisation engineering and commonisations that we can build a much larger capacity then required at no additional investment."
"We are building new plant at no additional investments. We have just done some industrial engineering, which gives it good capacity that it may or may not need albeit with the vision that one day we will come up with a motorcycle that will sell more than 1,000 units a month. Also, the brands that we are working with are coming up with new models, so we always have kept the vision for that. After you have launched a brand, the success depends on sales and marketing, you cannot keep focusing on production and if it coming at no additional cost then, why not?" said Firodia.
Localisation and future plans
At present Firodia says the company has already invested around Rs 30 crore in the overall scheme of things. Explaining the expenditure, he says, "Homologating each product costs around Rs 50 lakh to Rs 60 lakh. Setting up assembly lines, doing the market research and arranging for working capital translates to around Rs 5-6 crore for every new bike launch including the working capital."
Norton in India
In November 2017, Motoroyale inked an international collaboration with Norton for assembly and sale of Norton motorcycles in India and ASEAN countries. The partners agreed on Norton providing the IP and design/engineering for current and future models to the joint venture, and Motoroyale offering localisation, homologation and manufacturing support.
Confirming the same, Firodia said Motoroyale is at an advanced stage to bring out the Norton 931 and Dominator with around 50 percent localisation. He added that Norton is working on new products and its partnership will also give it an opportunity to be involved in the development right from the start. "It (the new Norton) may turn out to be localised directly.”
Speaking on extending localisation for other brands Firodia said, "We need to increase the localisation not just for Norton but for other brands as well because the dollar is getting stronger and stronger. Why will it not give India a chance? If you are successful, why not source from India for their (brands) local requirements and in the Kinetic Group we have the whole experience and expertise for component manufacturing. Any localisation process has the potential to reduce the price by around 20-30 percent if done correctly, but again it will depend on the parts which are localised and how do you do it. It is not just done in the context of reducing price but also inventory management, business. In concept we have discussed with others but haven't firmed up the plans as of yet. This won't ever happen for MV Agusta, because they just won't do it."
Expansion on the dealer front
Motoroyale also formally announced as part of Phase 1 in expanding its sales network, it has appointed six new dealers in Mumbai, Delhi, Hyderabad, Chennai, Kochi and Bangalore. It also plans to further add 12 dealers in 2019.
Speaking on this issue, Firodia said: " We are targeting a minimum of 45 dealers in India. We have already identified the markets, cities, the first 20 cities are those where 90 percent of the premium market demand is and then we can expand to the other cities when we have the products suitable for those markets or when those markets evolve to see demand for such kind of products."
In terms of business case for the dealers, Firodia said that retailing around 15-17 motorcycles from the brand will give them an industry-leading margin of around 9 percent. And with around 7,000 Hyosung customers already in India, servicing the existing parc also opens a huge business opportunity. "The dealers already have a potential to recover costs if they do the servicing of 100-120 bikes a month, which is quite possible. We are already converting a lot of Hyosung dealerships anyways, which becomes a viable proposition. "
Earlier today, Motoroyale marked the India debut for Italian brands FB Mondial and SWM with the HPS 300 and the Superdual T. Meanwhile Korean manufacturer Hyosung has made its re-entry to the Indian market with the Aquila Pro 650 and the GT250R.
Additionally, Italian superbike maker MV Augusta has introduced the Brutale 800 RR at Rs 18.99 lakh while Norton has launched the Commando Sport MK II and Dominator at Rs 20.99 lakh and Rs 23.70 lakh, respectively.
Motoroyale says it has sold around 237 MV Agusta motorcycles in India.