Interview with Pankaj Dubey

Managing Director, Polaris India Pvt Ltd

Date: 05 Sep 2016 | Author: P.Tharyan

Indian Motorcycle has been steadily launching products in the Indian market with the latest being the 2016 Indian Scout Sixty. How will you describe the progress made by your company so far?

India’s Two-wheeler market is one of the largest and the fastest growing in the world. The CAGR of luxury bike market is projected at 20% till 2020. We are very excited with the positive response received by Indian Motorcycle launch in India. In the year 2011, Polaris acquired Indian Motorcycle and in the year 2013, we launched Indian Motorcycle’s products internationally. It took us about six months to introduce the entire range in India and it was in May 2014 that we inaugurated our first dealership in India in Gurgaon. It has been almost two years since then and it has been an upward journey for the brand. I am very satisfied with the performance. For us, India is a key market and presents numerous opportunities as a company. It is a rapidly growing market and we are witnessing a good response across the product line.

We are growing from strength to strength. I am happy to inform you that we have been able to increase our market share to 11% market in the period Jan -April 2016 against the 3% market share in the period of Jan- April 2015, in the relevant market. We expect to beat the expected industry CAGR of 20% till 2020.

The prices of your vehicles start from the Rs 10 lakh plus level to around the Rs 30 plus lakh range. Are Indians ready for such expensive vehicles or do we see more demand in the Scout range of vehicles?

Increasing aspirations, changing lifestyle and an increased purchasing power is altering the biking landscape in India. The growing appetite for luxury is leading to an increased off take of the premium luxury bikes in the country. The desire to own a piece of luxury is acting as an incubator for the superbike segment. The change in the biking culture in India has the potential to completely alter the premium luxury bike landscape of our country and usher a brand new era of bikes. The outlook for the Premium motorcycles seems very promising as the overall consumer spending and high net worth individual (HNI) population is on rise. According to “Premium Motorcycles Market Forecast & Opportunities in India, 2017, report the sales of luxury bikes have grown at a rate of 35% over the last three years in India—the fastest among motorbikes.Having said that, I would like to reiterate that these are still very early days for the Luxury motorcycles as a segment.

Our Chief range starts at Rs 24 lakh and upwards up to Rs 38 lakh. These bikes are super premium and so are the customers. With the introduction of the Indian Scout which starts at Rs 11.99 lakh, we are even seeing a comparative larger appeal among the luxury motorcycle space. In fact, with Scout and Scout60 we are expediting the dream of bike enthusiast who always had the dream of owning an     Indian Motorcycle and that’s where the volumes are also building up.

Overall, do you see the Indian premium motorcycle segment growing or will a lot depend on India’s infrastructure development?

Better infrastructure is a must for automobile growth whether it is two wheelers or four wheelers. While   the National Highway development programme (NHDP) has started gathering steam, it is also important that roads which connects various cities and tourist locations of India should also get world class infrastructure .This will  not only unlock the  demand for vehicles in smaller towns but will help  the country in realizing  its true potential in personal mobility and attract tourism.

As far as the future outlook of the ultra-luxury two-wheeler segment in India is concerned, it is very positive and shows a lot of potential. The good thing is that this segment is growing and will continue to do so with increasing aspiration and appetite for luxury.We did research in India before we came in and we found that the customers in this segment are more inclined towards cruisers or touring bikes and that’s where the Indian® Motorcycle fits in. Since the introduction of these motorcycles in the Indian market in January 2014, there has been a lot of excitement amongst the motorcycle aficionados across the country.These luxury motorcycles are generating a lot of interest and demand due to their unmatched quality dynamic looks.

You have around seven dealerships in the country with more coming up. What is the road map for increasing your dealerships?

 Yes, you are right. Our dealer network expansion is going on full steam with the recent addition of the seventh dealership in Chandigarh. We have a plan of opening few more dealerships in the coming months, Kolkata, Cochin and Jaipur are under construction. Our commitment towards Indian market can be gauged from the fact that we have brought the entire Indian Motorcycle’s Chief range – Indian Chief Classic, Indian Chief Vintage, Indian Chieftain, and Indian Chief Dark Horse along with Indian Scout Sixty, Indian Scout and Indian Roadmaster to India.

Do we at any stage see an assembly operation for the Polaris products including the motorcycles, or is it too early for the company to look into that area?

Any worthwhile investment in manufacturing would require a steady demand pattern for a considerable period of time. As far as Indian Motorcycle is concerned, we are looking at a time frame of 2-3 years to start an assembling unit in India. This decision will largely depend upon the demand pattern of the vehicle. If the demand curve continues a positive trend, which it seems it will, we could start with CKD facility in say next 2-3 years from now. However, as of now we have not finalized anything and therefore not in a position to share any kind of proposed investment figure. We are committed to Indian market and whatever investment would be required it would be done.

I have only one point to addhere, since you have asked about manufacturing. Automobile sector does not work in isolation and its failure or success have a direct bearing on the allied sectors like the auto component Industry. So rationalization of the exorbitantly high import duty structure on CBU would not only help in reducing the prices of the end product but will help in increasing the sales of the luxury vehicles further which would  help the demand off take of the allied industries. Once the demand for these vehicles picks up, I am sure the manufacturers will find it more prudent to establish a manufacturing base here in India rather than importing these vehicles in order to get economies of scale. The key is to make global products manufactured in India and the biggest bottleneck, contrary to common belief, is the high import duty.So I would request the government to pay some attention towards the development and growth of this segment, which holds great promise and is also capable of providing jobs in large numbers.

 

 


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Pankaj Dubey
Date - 05 Sep 2016

Managing Director, Polaris India Pvt Ltd