Though its streets are still dominated by small-capacity motorcycles, India is one of the happening markets of the world. It is no wonder that many global manufacturers are hell-bent on making a beeline to India’s untapped potential, as their fortunes in other markets take a hit due to volatile economic conditions.
Having said that, we also need to mention that India is no cakewalk either. A murky market it is, where fortunes can swing like a metronome set on “Presto” mode. Price sensitivity is a critical aspect of the Indian market, owing to the still less-than-developed per-capita income despite a burgeoning list of millionaires.
FOREIGN MANUFACTURERS’ WOES :-
Foreign automakers looking to take a plunge into the waters of the Indian market often exercise restraint despite the lucrative promises it offers. If they set foot alone, exhaustive start-up costs can lead to ballooning of the product prices, hence leading to an always-avoidable under-recovery situation. As a proper give-and-take situation, these foreign automakers have to provide expertise to domestic manufacturers in the form of better technology and industrial practices.
THE SOLUTION : MUTUAL SYMBIOSIS:-
What’s the way out? Hey, there’s a troika of Indian manufacturers (Some fringe players as well) who are pretty much acquainted with the terrain, and have a proficiency in low-cost manufacturing. So why not extend a hand of friendship to these local satraps and set about scaling the peaks together? After all, it’s lot less expensive to use a partner’s facilities to manufacture rather than open up one’s new plant and then start rolling out.
The above lines nearly sum up the modus-operandi of foreign automakers. So we have had a period of Japanese JVs like Hero-Honda, Bajaj-Kawasaki and Escorts-Yamaha. Unfortunately, most of them have fallen apart as the Japanese managed to gain a strong foothold and decided to start playing solo. The trend now is for tie-ups between Indian and European giants, who had been hibernating till now. KTM-Bajaj, TVS-BMW and Hero-EBR are already out in the media and print spheres.
SO, WHAT’S NEW? :-
According to Indian Express, the fresh information is that we could have a fourth tie-up on our horizons, with American ATV giant Polaris and Indian corporate Eicher Motors probably looking forward to join hands for charting the challenging Indian market. Polaris has a couple of sizeable brands under its belt, namely the Victory Motorcycles and the iconic Indian Motorcycles, of “Chief” fame.
Polaris’ executives are of the feeling that India could be too hot for them to handle alone, and hence they need the assistance of a local player to gain sufficient traction in the market. As Polaris is looking forward to unveiling it’s Chief motorcycle and probably some steeds from Victory’s stable as well to hunt down Harley-Davidson and Triumph, Eicher Motors was the go-to name, having the exquisite brand of Royal Enfield under its fold.
Sources whisper about the possibility of the use of an old, deserted Royal Enfield facility near Jaipur in Rajasthan. Though no one was willing to confirm the developments, they all agreed that high-level discussions are in progress between Polaris and Eicher. This tie-up spells importance for Polaris since local assembly would translate into lower product prices.
A very faint possibility even lies for a India-specific, inexpensive bike being developed in collaboration between Polaris and Royal Enfield, to lash out at the lowest price of 7 lakhs for a Harley-Davidson. The situation is promising for Royal Enfield, since it gains access to better technology which can help cover up the minor chinks in the armor of its bikes. (Read engine oil leaks, tappet problems and vibrations)
THE CATCH-22 SITUATION :-
The situation is lucrative for Royal Enfield as it stands to gain from Polaris’ expertise. But as the sources mentioned, Royal Enfield is in a caveat. They might gain in technology, but at the end of the day they have assisted a competitor and gifted it valuable market share.
Royal Enfield is in a upbeat mood and they are looking ahead at stepping into the more premium market against Triumph, Victory, Indian as well as Harley-Davidson, sometime in the future. Would they want to hack at their own feet by helping Polaris now??
What do you feel? Should Royal Enfield go ahead with the Polaris tie-up??