Sales get on the super highway

Premium motorcycle maker DSK Hyosung plans to set up a new plant  in Karad near Pune. With this plant, the company hopes to increase its percentage of localisation. In an interaction with Deccan Herald, DSK Motowheels Pvt Ltd Chairman Shirish Kulkarni shares his experience.

In which year did you start assembling the Hyosung bikes? How was the experience?

We started assembling Hyosung superbikes under the brand name of DSK Hyosung from 2012 at our facility in Wai, Maharashtra. DSK Motowheels had the opportunity to enter the superbike segment, and we were more than thrilled to take on the opportunity. Immense learning followed and the commitment to bringing superbikes into India turned absolute.
What are the investments you have made till today? How big is the plant?

Being a leading super biking brand of global repute, Hyosung is known for its high-end biking experience, extended product line, technology and quality. Since the inception of DSK Motowheels in 2012, we have made suitable investments in our plant to assemble Hyosung superbikes. 

Currently, we assemble both bikes and engines at our facility. We assemble 14 bikes in a single shift today. Going forward, as per growing demand, our plant is fully equipped to double our shift to match the requirements.
What are your future investment plans?

Currently, our major investment revolves around the setting up of our new plant coming up in Karad near Pune. With this plant, we hope to increase the percentage of localisation. The plant will also house a R&D set-up and play a crucial role in customising new bikes and scooters.
What are the challenges you see in this industry?

With increasing income levels, high levels of market exposure and global lifestyles, the superbike segment in India is capturing the imagination of Indians today. 

Having said that, the segment on the whole, is still in a nascent stage and extremely niche at the moment — compounded by the challenge that India is an extremely price-conscious market. 

Hence, it becomes extremely critical to strike the perfect balance between pricepoints and value proposition offered to customers. While the phenomenon of superbiking is majorly an metro one, there is huge untapped potential in the tier II and III markets.You cannot ignore the fact that India is an extremely lucrative market and luxury buying, whether cars or bikes, has been on the rise. 

The last few years have witnessed a slew of international brands entering the market vying for a share of the superbiking market pie. The result is that as competition hots up, the Indian consumer stands to gain.

What is the size of the bike industry in India, more specifically, in the entry levels and cruise segment?

India is the world’s second largest two-wheeler manufacturer in the world. This segment dominated production volumes and exports in 2012-13, accounting for about three-quarters of the total automotive production in the country. With the increasing number of brands entering the Indian market, the country has exhibited huge business potential, which goes on to prove that the projected growth rate of 6-8 per cent in 2013-14 and growth in sales from 15.9 million in fiscal 2013 to 34 million by fiscal 2020 is achievable.
Any plans to release 150-cc bikes in the near future?

We have concrete plans to venture into this segment. However, we are currently focusing on the superbiking range. Once our new facility is established and the market is mature, we will be targeting the aspirational spirited youth with our stylised new 150-cc bikes.
What has your major competition been so far with respect to Indian players in the same segment?

It depends on whether you are looking at the picture holistically. While categories may have other players in the market, DSK Hyosung is the only brand which offers customers an entire range or portfolio of products, catering to a varied biking performance that takes into account need, speed, taste and budgets.
What has the response been in terms of sales volumes in the previous quarter?

Growth in terms of sales has been phenomenal for the previous quarter. We have witnessed around 80-90 per cent year-on-year growth this year when compared to the same period last year.

What is good is that we have grown organically in terms of sales and network presence. While we have achieved growing sales numbers through our current dealerships, our network presence has gone up to 37, which includes tier II and III cities. This goes on to reiterate our network strength with the strongest and most well entrenched presence across the country in the superbiking segment ensuring unparalleled reach, unmatched products and world class service offerings.
What has the response been in the Indian market to bikes in the 600 cc and 700 cc categories?

The 600-700 cc segments are niche ones and DSK Hyosung has the distinction of identifying and introducing this mid-segment range to the Indian market and consumers. 

The good news is that the segment has caught on very well, reiterated by the fact that our luxury cruiser, the Aquila PRO GV 650, has been our biggest success last year. It received overwhelming response winning several awards and accolades from the media, customers and critics alike.  Apart from this, our classic cruiser offering the ST 7 has also generated a lot of response and excitement in the market.
Of the models in the market which do you see as the frontrunner with respect to sales volumes?The frontrunner with respect to driving sales volumes has been the 250-cc segment due to affordability and size, which suits Indian conditions and sensibilities.  The high-end cruiser bikes have their own charm and a niche audience, which is also growing.
Do you have any localisation plan to become cost-competitive?

As a superbike assembling company, our efforts have always been into localisation as much as possible so that we are able to offer our customers the best pricepoints. We are working on increasing the localisation of our bikes at 10-15 per cent and will increase it in future. 

As a result of sustained efforts, we have been able to break through the threshold barrier and bring down costs from Rs 2.79 -5.8 lakh in 2012 to Rs 2.63 – 5.75 lakh.
Till today, how many Hyosung bikes have been sold? Which region gives you the advantage over your rivals?

We sold more than 1,850 bikes last year and hope to achieve the target of 3,000 units across different variants this year. 

As mentioned earlier the superbiking phenomenon is still largely seen in major cities, and hence, we are doing extremely well in cities like Mumbai, Bangalore, Delhi, Pune, Kolkata and Chennai while efforts to ramp up in tier II and III cities are ongoing.