An unexpected rise in demand for motorcycles has compelled bike manufacturers to ramp up production by undertaking expansion plans
As of now, the waiting period for bikes from companies such as Hero Honda, Yamaha, Bajaj etc ranges between 3 and 6 weeks. It is to be noted that since January 2010, demand for models such as Hero Honda Karizma, Bajaj Discover DTS-SI, Bajaj Pulsar has almost doubled, which is further increasing the waiting period. While Bajaj’s waiting period for its top model like Pulsar is about 3 weeks, it takes almost month to get scooters such as Honda Activa and Deo.
In this context, Ravi Jain, managing director of Ravi Transmission Products, a mid-sized manufacturer of automotive ball bearings in Mumbai, says, “The surge in demand is also accredited to the fact that there were apprehensions among consumers about hike in excise duties and implementation of stricter environmental norms, which would push up prices of bikes. Therefore, bike makers have got orders beyond their expectations.”
Steps undertaken by companies
Meanwhile to satisfy consumer demand, leading bike makers are stepping up their manufacturing capacity. Not only are they ramping up production, but are also looking to open new manufacturing facilities and improve their distribution network to clear orders. For example, Yamaha Motors, whose waiting period ranges from 2-6 weeks for its top model such as YZF-R15 and Fazer, among others has increased the number of shifts to meet the rising demand. Similarly, Honda Motorcycle & Scooter India (HMSI) is investing Rs 4.7 billion to set up its second manufacturing plant in the country with an installed capacity of rolling out six lakh units. Hero Honda is also holding talks with various state governments to set up a new factory and is soon likely to take a call in this regard.
Shortage of bike components
In this context, Manjunath S Samprathi, managing director of Sun Castings, a mid-sized manufacturer of auto ancillary units in Bengaluru, says, “The waiting period for motorcycles have also increased due to shortfall of components. The component suppliers are unable to cope with the rising demand. Due to the economic slowdown, a majority of component suppliers had cut down their operations. Several small firms had even closed down their operations with slump in sales as they were unable to recover operational costs. Therefore, most vendors will need time to expand their operations. Waiting period will reduce once these vendors are able to supply parts on time.”
Industry players opine that the growth rate witnessed by bike makers is likely to sustain in 2010-11 as well, with the economic activities in the country reviving after countering recessionary pressures. They also opine that the segment will witness intense competition in coming months with a slew of new launches by several companies. According to data released by Society of Indian Automobile Manufacturers (SIAM), over 74 lakh bikes were sold in the country in 2009.
Arup Choudhury |
Bike manufacturers in the country are on a roller-coaster ride as increase in income and consumer confidence has propelled demand for bikes. The unexpected surge in demand has taken even bike makers by surprise, with majority of them increasing their production capacity to meet the escalating demand. 
