Big is beautiful

Big is beautiful

Mumbai: To the average luxury bike manufacturer, S. Kumar must be as close as it gets to the ideal consumer. A self-confessed enthusiast, Kumar had already owned a Suzuki GSX-R1000 when, last March, he became one of the 110 Indians who paid Rs12.3 lakh for a Hayabusa. Three days after he booked his Hayabusa, Kumar took delivery of his dream machine—and immediately rode it to Jaipur. “Every ride," he gushes, “is an experience in itself."

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Already, however, Kumar, a 36-year-old businessman in New Delhi, is eyeing Suzuki Motor Corp.’s next luxury motorcycle, expected later in 2010. In 2009, Kumar and others like him put luxury bike and car manufacturers in a pleasant but piquant situation—one in which they feared that the units assigned for the Indian market would run out before the year ended.

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World Wealth Report 2009 may have counted only 84,000 Indian high net-worth individuals in India at the end of 2008, down from 123,000 in 2007. But in 2009, Indians still bought 250 super luxury bikes, priced at Rs10 lakh and above, and 150 super luxury cars, priced at least at Rs1.5 crore. It’s little wonder then that Kumar can airily dismiss the economic slowdown. “The recession," he says, “was a scare created overseas!"

As a trend, this seems to be at odds with the hype about small—or perhaps it only illustrates that the Indian market can now accommodate all comers. Neeraj Bandhu, a director at automotive forecasting firm CSM Worldwide, believes that the buying spree is simply pent-up demand, unleashed after luxury models formally launched in India. “With most brands having a presence here, access to them is now far easier," he says. It helped, of course, that the Indian government chose in 2008 to exempt motorcycles above 800cc from homologation, a form of official certification. The very next year, released from these shackles, Japanese, European and American manufacturers sprinted into India. The response was, to say the least, encouraging. Yamaha Motor Co. Ltd sold out its MT-01and R1 models within five months of launch. “We had expected them to last till December, but we ran out in August," says Pankaj Dubey, national business head at India Yamaha Motor Pvt. Ltd. Dubey now has a backlog of 40 orders.

Then, apart from the Hayabusa, there was the Kawasaki Ninja. Imported into India by Bajaj Auto Ltd, the Ninja has sold 200 units at its price of Rs3 lakh, and demand has whipped up a four-month waiting period. Amit Nandi, general manager of marketing at Bajaj Auto, hopes to sell 1,000 units in 12 months.

This promising market has begun to attract attention. Ducati Motor Holding Spa, an Italian bike maker and a byword among motorcycle fanatics, has started to establish Indian dealers, and it plans to sell 150 bikes in 2010. Last month, Mirko Bordiga, chief executive officer of Ducati Asia Pacific, told Mint: “India...has a big potential, but (it) is very unexplored". The most iconic brand of them all, Harley-Davidson, announced last August that it would ride into India with 15 models.

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It would be tempting to dismiss luxury motorcycle sales as a result of buying by bike eccentrics, were it not matched by a similar hunger for luxury cars. Small or compact cars still accounted for two out of every three cars sold in 2009. The biggest buzz, after all, surrounded the July launch of the Tata Nano, and multiple new small cars—Volkswagen Beetle, Ford Figo, Volkswagen Polo and Chevrolet Beat—have announced their designs on the Indian market.

But at a time when passenger car sales rose 21% to 1.2 million by volume in the April-November period, there’s room for everyone to play. Sharad Kachalia, whose Mumbai dealership sells Rolls-Royces and BMWs, expects a 10% growth in luxury car sales in 2010. Which is why Colin Kelly, Asia-Pacific regional director, Rolls-Royce Motor Cars Ltd, fears that his allotted 50-60 cars for India will run out, keeping several buyers waiting. So also with Rod Wallace, managing director at Porsche Cars India Pvt. Ltd, who worries about having sufficient stock of his Panamera model. “I don’t think I’ve ordered enough cars, and all of them will be sold out by March", before the next models arrive in July, he frets. Porsche sold 168 cars in India last year. Wallace has a target of 250 sales in 2010.

True to economics textbook explanations, the luxury motor market has proven inelastic—insensitive to food inflation or declining stock markets, fuelled by passion or a quest for status. “I always dreamed of owning such bikes," says Atul Dongre, a 42-year-old motorcycle fan in Mumbai, who bought a Yamaha R1 soon after its launch and who has now added the Ducati 1198 and the Harley-Davidson Fat Boy to his wish list.