Benelli to create market in India for its high-power bikes
Benelli, one of the oldest Italian motorcycle manufacturers, produces two-wheelers for various markets in the world. The company recently re-entered India, after a short hiatus, by announcing a strategic partnership with Adishwar Auto Ride India (AARI), a Mahavir Group company, one of the leading automobile dealers in the country. Benelli aims to make a strong foothold in the sub-continent and to introduce a series of vehicles by creating its own space. The upcoming CKD assembly plant is also entitles to assemble, manufacture bikes and import exclusive range of Benelli bikes from Italy and South East Asia regions. In an interaction with Sricharan R of Auto Components India, Dante Bustos, Chief Marketing Officer, Global, Benelli, and Vikas Jhabakh, Director, Mahavir Group, spoke about the new launches and how it plans to cement its position in the Indian market. The excerpts:
Q: How is your second innings in India planned and what are all your action plans for the next 2 years?
Dante: After our strategic partnership with the Mahavir Group, we have signed a MoU with the Telangana Government to set up a manufacturing plant in the state at Medichal, Pochampally, Hyderabad, which will be spread over approximately 3 acres. Our actions for the next couple of years will be in 2 phases. In the first phase, setting up an assembly line, which is already under development and it should be ready to roll out the first bike as early as October this year. The plant at full capacity can make (assemble) close to 10,000 bikes a year. We believe that at least for the short term, this is going to be enough to take care of the demand in India. By 2020, we will be launching the following 10 new products: Leoncino 500, Leoncino Trail, Leoncino Sport, TRK 502, TRK 502 X, TNT 302 S, Leoncino 250, TRK 251, Imperiale 400 and Imperiale 530. In the cruiser segment, 402s will come after them.
Vikas: The Indian market growth in the superbike segments is high, in double-digits. Customers need more high-power motorcycles. So the market will grow much faster and we are concentrating on that. Earlier we had 300cc twin cylinder engines and 600cc four-cylinder engines, which were successful. But now we have entered the market with 750cc twin cylinder engines and jumped to 900cc and 1000cc three-cylinder engines which will be equipped with new technology. We will soon have small displacement single cylinder engines with 2 and 3 spark plug technology, which will allow us to develop a
lot of models for global markets, including India.
Q: How will the new products strengthen your portfolio?
Vikas: Benelli has always been one of the first few companies to enter into an area which has not been touched by many. When the company came to India, Benelli was very popular in the 300cc segment as a brand having value for money. In the last 3 years, a lot of other companies have caught up in that area and Benelli has lost some space.
Now with the return, we are talking about Leoncino 500 and TRK 502. Benelli is going to create its own space for the 500cc engine. This will be a growth spot and many more companies will be coming in. We are not filling a void we are creating our own space.
Q: Will the existing products continue to be on sale?
Vikas: TNT 899 and 1130 have been discontinued due to BS IV transition and we don’t have any plans to re-launch them at the moment. The TNT 25, 300 and 600 GT has also been discontinued. So, among the existing ones, only the TNT 302R and 600i will be carried forward.
Q: Will the new products be made in India?
Dante: Maybe in the future all bikes will be made here. As of now, we can do only one. This is in terms of capabilities and technology. We first need to understand how the supply chain in India is. We need to get in touch with them, negotiate and if all these work, we may start. We can also make India as a possible hub for manufacturing in the future. In the past 3 years, we did not have enough experience in the market and these learning curve needs to come. Now, we need to start over again in a new way and in a step-by-step process. So this is going to be the project forever and not a short-term plan.
Q: Could you elaborate on the new dealership and the phases in India for the company?
Vikas: The phase 1 is to get back to the market as quickly as possible and quickly restart supplying products to customers. On the dealership side, we met every existing investor and shared the current situation and plan. Over 90% of those investors continue to be with us and we already have around 18-19 touch points across the country. They will continue their association with us. We have already started supplying spare
parts to the customers. Going forward we are looking to add more touch points. By the end of 2020, our product portfolio will have 12-15 offerings and we will have close to 55-60 touch points across the country which is both sales and service.
Simultaneously, we are setting up a task force in which we will have people from Benelli who will evaluate the phase-II entry and decide on localisation, manufacturing, bikes, R&D etc. With the knowledge of the task force, we will take the phase-II forward. The timeline will be 12 to24 months. We want to do it as quickly as possible. The task force is also looking at possibilities of bringing certain component manufacturers from China and other places to India, because a lot of them are already suppliers to Benelli.
Q: How ready are you to meet the BS VI norms? Dante:
Being present in over 60 countries, we are well aware of the regulations in each country. BS VI is almost similar to the Euro VI norms of Europe and our products are compliant with them. It will be easy for us to bring the technologies to India. Benelli will not launch a bike without ABS as it has become a basic spec for the customers.
Q: What will be your target for the year?
Vikas: Between 2015 and 2017 we sold 5300 bikes and 300400 in the first quarter of 2018. Among the Harley, Triumph, and Kawasaki, we have a market share of 21%. We would be selling nothing less than 1000 units a month. But we are realistic. We want to go step by step and we need to be sure that we have an established network; we need to ensure that we have the spare parts and after sale. Once the full operation starts in 2019, we will look to do around 3000 units.
Q: What is your localization plan?
Vikas: At the phase-II development we will be looking at localisation, but we are not sure about the time-frame. Our Qjian Jiang (QJ) Group’s greatest strength lies in manufacturing. That’s the reason 80% of Benellis’ parts are made inhouse and not outsourced from suppliers. So, when we start the manufacturing process here, we won’t have any local suppliers. If we are in need of suppliers, we will bring who are supplying to us.
Q: Do you plant to set up an R&D centre here?
Dante: We have a R&D centre in China. We are also planning to set up one here with the new plant and we are very serious about it.