‘Four wheels move the body, two wheels move the soul.’ Motorcycles are all about drama, thrill, adrenaline and freedom. India’s two wheeler segment is a very popular one. The main reason – affordability. But affordability does not always require compromise. For motorcycle enthusiasts, the way the machine looks is equally as important as the way it rides. Thus, as the impression is, most well-made bikes command a premium over the rest. Which is why, the market for premium motorcycles isn’t as vast in India. Most premium motorcycles start at a price-point of 5 lakhs, making the expensive propositions available only to the upper middle class. Hence, the affordable players have a much bigger portion of the pie.
Eicher Motors has a pretty large stronghold on the Indian market, largely due to the Royal Enfield brand. Royal Enfield provides a good quality, butch motorcycle with road presence, at an attractive price point, giving them a large portion of the market share. The >250 cc segment is the most popular category in India and RE currently dominates it with the Classic 350 and the Bullet. A lot of brands try to compete in this category since it revives the most traction but none are able to overtake RE.
Bajaj launched the Dominar, 400cc motorcycle in hopes to increase its market share in that category. A few years ago, they launched an ad campaign to promote the Dominar called ‘Haathi mat palo’ with the intention of trolling Royal Enfield. However, the campaign too didn’t make any major changes to the hierarchy. The ‘elephant’ stood its ground.
Recently, Harley Davidson, an iconic American brand re-entered the Indian market after its sudden exit in 2020 with an all new, affordable motorcycle called the X440. It is a 440cc motorcycle priced at Rs. 2.29 lakh. Which is just a 15 percent premium over the RE Classic 350 and Meteor 350. Harley Davidson in India, was considered the creme de la creme. They sit at the premium end of premium motorcycles, making them quite expensive to buy. RE did not have any solid competition in the >250cc segment, making them the ultimate choice for a buyer. However, with the entry of Harley Davidson, a consumer now has the option of owning an aspirational brand with legendary heritage for just a few thousands more than the popular Classic 350.
Bajaj hasn’t given up either. Triumph, another premium brand under the Bajaj banner, launched the Speed 400 and the Scrambler 400x at a starting price of Rs. 2.33 lakh. As mentioned earlier, the segment is the most popular in India with high margins. Naturally, everyone wants a piece of the pie.
“The >250cc market may have space for 2-3 players. The high gross margins of RE at ~43 percent, Rs 75,000 per bike, make the segment attractive for new players,” wrote analysts at Nomura.
Consumers are now spoilt for choice. What can stop them from choosing a premium motorcycle and disrupt the market share that Royal Enfield commands? RE, which commands 90 percent market share in the segment, with 735,000 units sold in India in FY23, now stands to lose some steam despite the market size growing.
The three new models by Harley Davidson and triumph target essentially three categories. First, the bike-lover looking for a ‘swanky’ purchase. Second, the ‘RE Bullet loyalists’ who can now upgrade to a Harley or Triumph by paying a few thousand more. Third, upper middle class men and women in their forties, fascinated by the sleeker, retro look, who may not be owning a bike now.
This is clearly an exciting period for motorcycle lovers. With premium brands looking to target the average consumer, will there be demand for the new motorcycles and will RE lose its throne. Well, demand in its most literal sense is the desire to buy a commodity backed with the purchasing power. All boxes have been ticked, time will tell. For now, consider the most popular motorcycle segment is India, officially disrupted.