India is the largest two-wheeler market in the world, and helping it stay there are the various manufacturers who have set up shop in India. Two-wheeler manufacturers from around the world have prioritised the Indian market because it is still growing, even after becoming the largest in the world.
Many manufacturers from different parts of the world are producing their motorcycles here, and exporting them. There are several niche motorcycle manufacturers as well, but the majority market share belongs to the players in the mass-market segment. While there are many trying to get into the mass-market segment, Mahindra Two Wheelers has decided to leave this segment alone.
Mahindra Two Wheelers entered the mass market two-wheeler segment in India back in 2008, after acquiring the business assets of Kinetic Motor Company. The company then started production of a few rebadged Kinetic products and added more two-wheelers to the product line-up as the years went by. However, in its nine years of existence, the company failed to turn a profit.
The company's products were good, but could not keep up with the competition as models from TVS, Hero MotoCorp, Honda and Bajaj were giving the Mahindra models a run for their money. The Mahindra motorcycles and scooters were selling, but at a slow rate, and even after Mahindra Two Wheelers merged with Mahindra and Mahindra last year, the profits just did not seem to roll in.
Mahindra Two Wheelers was quoted as saying, "The company has withdrawn from the mass market segment of two-wheelers and is currently developing products for niche markets."
Mahindra Two Wheelers had to decide because things were becoming worse for them. SIAM data revealed that Mahindra Two Wheelers' sales were down by a massive 77 percent during April-July in 2017 when compared to April-July 2016. At the end of 2016, the company's market share was a mere 0.9 percent.
Disappointing isn't it? Well, a decision like this was coming. But, the decision to stick with the niche market is surely a wise one and does make sense.
Here's Why Mahindra Quitting The Mass Market Two Wheeler Segment Makes Sense:
In October 2015, Mahindra launched the Mojo, their long-awaited niche segment touring motorcycle. The Mahindra Mojo received rave reviews from almost everyone who rode it, and even critics were all praises for its excellent build quality and smooth, reliable and grunty engine.
The motorcycle did not sell as well as Mahindra might have expected it to, as Mahindra Two Wheelers was still a relatively unknown brand.
What hurt the Mahindra Mojo's sales the most though was the fact that Mahindra was too late to enter the 300cc segment, and there were motorcycles like the KTM 390 Duke, Kawasaki Ninja 300R, etc. already dominating the market. To make matters worse for Mahindra, Bajaj launched the Dominar 400 last year, at a lower price than the Mahindra Mojo.
However, the Mahindra Mojo did not lose its steam. Backing it up was its loyal owners, whom Mahindra had grouped, calling them the Mojo Tribe. The owners of the motorcycle swear by its reliability and tough build quality, and there are instances wherein, the build quality of the Mojo surprised many.
Be it the instance in which a Mahindra Mojo on a road trip to Nepal was run over by a tractor and yet, the bike started and was rideable or another instance wherein a Mahindra Mojo was ridden 90,000 kilometres over rough terrain within two years, the Mahindra Mojo has proven its mettle.
So, Mahindra has shown its capabilities of building a good 300cc, niche motorcycle, and given the way the company has been working, the decision to concentrate only niche motorcycles is not very surprising. Mahindra's subsidiary Classic Legend acquired the Jawa brand last year, in the process gaining rights to Jawa's subsidiary BSA Motorcycles.
Both the brands are well-known motorcycle brands with retro-styled bikes in their portfolio. Jawa once enjoyed cult status and large presence in the Indian market with its Yezdi motorcycles produced at the Ideal Jawa factory near Mysore. After being acquired by Mahindra, Jawa launched the 350 OHC 4-stroke in the European market.
The Motorcycle boasts of retro styling and is a niche vehicle. BSA Motorcycles too have retro-styled niche bikes, and all these niche motorcycles are under the ownership of Mahindra who has just announced that they would be concentrating solely on the niche two-wheeler segment. Is it coincidence? Think not.
When all the facts are put together, Mahindra's decision to quit the mass market two-wheeler segment and focus on niche two-wheelers makes absolute sense. The brand was doing bad enough in the mass market segment and was doing reasonably well in the niche market with just one product.
It is apparent that Mahindra would want to concentrate on their strengths and give up on their weakness, which is exactly what Mahindra Two Wheelers has done.
Mahindra's decision to concentrate only on niche models is perfect, and just what the Indian market needs right now. The Mahindra Mojo was reasonably priced, and if they manage to price the Jawa and BSA motorcycles too, wisely, then Mahindra has won over the entry-level niche motorcycle market in India.
The rumoured models under development based on the Mojo, along with the models from Jawa and BSA would together create a strong product portfolio for Mahindra in the near future.