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Battle Royale: Hero MotoCorp, Bajaj and Eicher Motors set for an epic clash in 2023

Battle Royale: Hero MotoCorp, Bajaj and Eicher Motors set for an epic clash in 2023

The battle for the premium motorcycle segment has intensified with the introduction of the Harley Davidson X440, developed in collaboration with Hero MotoCorp, and Triumph-Bajaj’s Speed 400 and Scrambler 400 X. These new entrants are expected to challenge the dominance of Eicher’s Royal Enfield in this segment. Industry experts believe that the entry of these bikes could help expand the market, which is currently relatively small, by attracting a wider range of customers and generating increased sales.

One of the primary reasons why the premium motorcycle segment has been limited in size is the dominance of Royal Enfield. With its iconic retro-inspired motorcycles, Royal Enfield has enjoyed a loyal customer base and a strong market presence. However, the introduction of the Harley Davidson X440 and Triumph-Bajaj’s Speed 400 and Scrambler 400 X brings fresh competition and alternative options for consumers. This increased competition can stimulate market growth by capturing the attention of motorcycle enthusiasts who are seeking new and exciting offerings.

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The expansion of the premium motorcycle segment has several potential benefits. First and foremost, it provides consumers with a broader range of choices. Different manufacturers bring their unique design aesthetics, technological innovations, and performance characteristics to the market. This diversity allows customers to find motorcycles that align with their specific preferences and requirements, whether it’s a classic cruiser, a sporty street bike, or an adventure-oriented model.

Moreover, expanding the premium motorcycle segment can attract new customers who may not have considered motorcycles in this price range before. The allure of owning a premium and prestigious brand like Harley Davidson or Triumph, coupled with the collaboration with respected local manufacturers like Hero MotoCorp and Bajaj, respectively, can appeal to individuals who are looking to upgrade from entry-level or mid-range bikes. This expansion of the customer base not only benefits the manufacturers but also contributes to the growth and development of the motorcycle industry as a whole.

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Competition within the premium segment also fuels innovation and advancement in motorcycle technology. As companies vie for market share and the attention of discerning customers, they are compelled to introduce new features, improve performance, and enhance overall quality. This competitive drive can lead to exciting developments, such as cutting-edge electronics, advanced rider-assistance systems, and efficient engine technologies. Ultimately, consumers stand to gain from these advancements as they enjoy motorcycles that offer better performance, increased comfort, improved safety features, and enhanced overall riding experiences.

For these new launches to succeed and facilitate the expansion of the premium motorcycle segment, several factors need to be considered. Pricing plays a crucial role in attracting customers, as motorcycles in this segment are typically higher priced than their mass-market counterparts. Striking the right balance between perceived value and affordability is essential to entice potential buyers. Effective marketing strategies that highlight the unique features, brand heritage, and overall desirability of the new motorcycles can also create awareness and generate interest among consumers.

Harley-Davidson's partnership with Hero MotoCorp heralded a new beginning for the brand after its exit from India in 2020.

Furthermore, product quality and customer satisfaction are paramount. Delivering motorcycles that meet or exceed customer expectations in terms of build quality, performance, and reliability is crucial for long-term success. Additionally, establishing a robust sales and service network is vital to provide customers with a seamless ownership experience, ensuring easy access to spare parts, timely maintenance, and responsive customer support.

According to Basudeb Banerjee of ICICI Securities, the entry of Harley Davidson X440 and Triumph-Bajaj’s Speed 400 and Scrambler 400 X into the premium motorcycle segment will put pressure on Eicher Motors, whose Royal Enfield currently holds over 90% market share. Banerjee believes that sustaining such high market share levels becomes challenging for any company.

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Jay Kale of Elara Capital supports this assessment, stating that the competition from Triumph and Harley will limit Royal Enfield’s ability to implement price hikes. With three options now available in the market, consumers will have more choices, and this increased competition will likely restrain Royal Enfield’s pricing power.

When a market becomes more competitive, companies often find it difficult to increase prices without the risk of losing customers to competitors. With the entry of Harley Davidson and Triumph-Bajaj’s motorcycles, Royal Enfield may face challenges in maintaining its pricing advantage and will likely need to focus on delivering superior value to retain its customer base.

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The presence of multiple players offering similar products in the premium motorcycle segment is expected to expand the market as it attracts a wider range of consumers. With more options available, potential buyers who may have been hesitant to enter the premium segment due to limited choices or high prices may now find the market more appealing.

The competition between Harley Davidson, Triumph-Bajaj, and Royal Enfield is likely to drive innovation, product enhancements, and potentially more competitive pricing strategies. This benefits consumers, as they will have access to improved features and better value for their money.

Overall, the entry of these new players in the premium motorcycle segment is expected to create a more dynamic and competitive market environment. It will likely lead to market expansion and benefit consumers through increased choices, improved products, and potentially more competitive pricing.

Hero MotoCorp Ltd has launched the Harley-Davidson X440, a mid-size motorcycle developed in collaboration with the American motorcycle giant. The bike is competitively priced, starting at Rs 2.29 lakh, representing a 15 percent premium compared to the popular Royal Enfield Classic 350cc and Meteor 350cc models.

Analysts believe that the attractive pricing and Hero MotoCorp’s extensive dealer network will be key factors contributing to the success of the Harley-Davidson X440. They anticipate that customers will find it an appealing option, particularly if the bike performs well on the roads. Analysts’ estimates indicate that Hero MotoCorp could achieve significant volumes of around 10,000 units per month from their jointly developed products with Harley, which is noteworthy compared to Royal Enfield’s total domestic volumes of 61,000 units per month in FY23 and projected to reach 77,000 units in FY25, according to Jefferies India’s recent note.

On July 5th, Triumph-Bajaj launched the Speed 400 motorcycle in India with an ex-showroom price of Rs 2.33 lakh. However, the price announcement for their other premium offering, the Scrambler 400 X, has been delayed. This joint venture between Triumph Motorcycles and Bajaj is set to make a significant impact in the Indian bike market.

Pre-bookings for both motorcycles began online last month, requiring a fully-refundable payment of Rs 2,000. The motorcycles had their world premiere in London and are designed and manufactured in Hinckley, United Kingdom. Customers will enjoy a two-year unlimited mileage warranty and a service interval of 16,000 km for both models.

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