Jun 19, 2007

Indian motorcycle evolution: xbhp debate

Blog regular first_synn pointed me this discussion at xbhp (who are celebrating four years... congrats guys!). It is an interesting debate. The moot point is this. 'Are motorcycle manufacturers (in India) moving at an evolutionary or revolutionary pace?' Here's my two cents.

Let us first understand the manufacturer's perspective. First, they manufacture motorcycles to make a profit. Period. Please leave your romantic notions at the door. If it wasn't profitable, no one would bother. If I had just one sentence to set up the reality in which we are debating this, that would be it. At the end of the day, it is all about the profit. Market shares, inventories, dealer networks, service initiatives are all crucial so that the profit can be maximised. Second, as is usual in economics, you can make profit in two ways, one is to sell high volume products with low per unit margins (making money on the bulk of the sales) and the other is to sell high margin products with low volumes (making lots of money per unit sale). Since we live in a world where both work, you could also do both.

So, the question are they evolutionary or revolutionary? Depends on how you define it. In my book, a small change like adding a disc brake to a formerly drum braked bike (one of first_synns evolution examples) could be both. Is it a big enough change to represent a revolution? Of course it is. The amout of feel, reliability and sheer braking power it brings to a bike is a revolution! Take the same bike to a racetrack, lap as fast as you can with drum brakes and then take a few fast laps with a disc, you will find the difference is revolutionary. In the market, however, the addition of the disc could just be a marketing ploy, and hence evolutionary. So, the product evolved, but its braking performance underwent a revolution.

But that's a circular way to look at it, right?

Someone else (I'm sorry I can't remember you xbhp id, please leave a comment, and I will update this post) posted that evolution is a small step forward, while revolution is a big leap.

Fair enough. From that perspective, we've had no revolutionary products at all so far. I firmly believe that all technology is only as good as the benefit it provides. So, is fuel injection a revolution? Not really. Our carb-ed bikes were really very good already, so it is a new tech that replaces an old tech, but benefit wise, it is still an evolution. And I could (and I would) argue the same for all the little piddly bits (twin- vs monoshocks etc). Will a multi-cylinder motorcycle represent a revolution? Depends. Will you be happy with a 10 bhp 100cc twin? However, show me a 18 bhp 100cc bike, and I'll say, whoa, that's revolutionary.

I think what I'm trying to say, is that I don't care as much for the details as I do for the big picture. Revolution, to me, is a big shift in stance. Say from a economy-minded plodder to a super-sleek, hi-po machine. What technological aggregates when into it doesn't really matter. If Hero Honda were to launch a proper RC211V-style Unit Link Monoshock mounted on a CD100, would it be a revolutionary product?

First_synn also said something about the bean counter phenomenon, this I agree with. Not enough people in the motorcycle industry are in love with motorcycles in the first place. This does make it harder for people like us to get what we want. One of the first things Ishikawa, the Yamaha head, did when he joined was to ensure that all of Yamaha India rode a bike whenever possible. Also, when a large part of your business is low-margin-high-volume sales, then the bean counter has to be the biggest decision maker. That is just how it is.

Enough! evolutionary or revolutionary? So far, evolutionary. It had to be. You need critical mass for any big event, and the gather of that mass is always evolutionary. Revolution? It's just around the corner...

7 comments:

first_synn said...

Thanks for the post, rearset..

Yes, it all depends upon perspective. Things that may seem absurd to the enthusiast willmake perfect sense, and then some to the bean counter.

But then we come to this hypothetical question: When it's time to take a step forward, Why are manufacturers still sticking with tinkering the same old? For example, why couldn't HH launch the CeeBer 150 instead of The Karizma? Both make the same power out put, but the former is revolutionary. One can put forward the argument of the Karizma sharing a common platform with the CBZ (ye olde) and the ambi, but come on..! How many parts do you think are common across the range?

To me, a CeeBeR 150, even at the initial price tag of the Karizma, would have been a whole lot more tempting. Now the counter argument to this is, why would people pay close to 90K for a 150CC machine.. I tend to give Indians more credit than that. We learned that a teeny weeny 800 cc car is miles better than the two monstrosities that ruled the roost, and that too without Shah Rukh ( ok, make it the big B) telling us how good it is. I think bike buyers are smart enough to appreciate a twin spar, liquid cooled 17 PS motorcycle. Even if it is 150 cc. Moreover, the numbers that India provides can potentially make it cheaper....

Oh my.. I have trodden too far down the "potentially" road... Oh well..

The point is, Our manufacturers are totally stuck in this cycle of one up-ing each other. Every other "all new" launch seems to pick up[ the features seen in a competing model, six months before.

I just hope that Yamaha will bring in the much needed revolution just in time for auto expo '08. But of course, you'd be knowing all about it.. ;)

Anonymous said...

Umm.. again.. i'd like to see a R6 being ride on our roads. :-)

Its not just the manufacturers, though am sure they do cut corners. You need an overhaul of the entire infrastructure, including legislation.

- Yugesh

Profitpub said...

I do agree with you.
To meet hunger of performance bikers, Yamaha launched R15. But i don't think it'll make as big a hit as Pulsar or the karizma. So Yamaha ends up with less profit.
Hence the rush of companies releasing 125cc bike almost monthly!!!

As for performance seekers the companies would tell them to import bikes on which the hungry govt imposes almost 100% customs tax.:)
The reason for all this is the economic divide in India and hence it wouldn't be soon that this problem would be solved.

www.india-bike.blogspot.com

sanjeev nanda said...

The problem is not everyone can afford a performance bike, hence automobile companies spend most of their R&D budget on low-end bikes to make them faster and more attractive for the average consumer.

Ofcourse things are changing and people are eager to buy larger, meaner bikes but it the segment will take time to eveolve.

Once we have the sports bike companies setup their manufacturing plant in India, we can expect some major change, and who knows the current 125cc segment may get replaced by min. 180cc.

Oh btw ive launched a website for hardcore bikers like me, do check it out. http://www.sanjeevnanda.net

Motorcycle said...

Thanks for this post, nice blog. Yes Performance bikes are equipped by large powerful engines and light aerodynamic bodies that will help them reach mind boggling speeds within seconds. While most performance bikes in the world cost well above Rs.10 lakhs, we Indians are fortunate to have our own affordable yet performance driven motorbikes.

Custom Made Choppers said...

The way you have explain the two ways of selling the product. This could be the best one sell high volume products with low per unit margins.

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Talitha S.