Benelli to cre­ate mar­ket in In­dia for its high-power bikes

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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.

Dante Bus­tos, Chief Mar­ket­ing Of­fi­cer, Global, Benelli

Vikas Jhabakh, Di­rec­tor, Ma­havir Group

Benelli Im­pe­ri­ale 400

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