Date:
06 May 2015
| Author: P.Tharyan
UM Motorcycles is an American motorcycle manufacturing
company and has its presence over 20 countries. UM Motorcycle India showcased
its cruiser range of motorcycles at the 2014 Auto Expo in Greater Noida. The company has announced its strategic joint
venture with Lohia Auto. Their initial plan was to launch a 400cc cruiser by
second quarter of 2015 and was looking to appoint 75 dealers across 50 cities
by July 2015.
The agreement between UM and Lohia envisages the creation of
a joint venture company with a 50-50 partnership between the two companies. The
joint venture company will market a full new range of motorcycles designed
especially for the Indian markets. The manufacturing facility will be located in
Kashipur, Uttrakhand utilising the
current Lohia Auto facility with a capacity to produce 1,00,000 units per year.
The expected start of production was slated to be around the second quarter of
2015.
The overall
investment in the joint venture company over a definitive period was expected
to be approximately Rs 120 crore.
Is the launch of the
400cc cruiser on schedule and what about dealerships, are they in place?
We will launch 300 to 500 cc motorcycle and which one would
be launched first is yet to be determined as we are doing a market survey to
freeze same. We are looking at hitting the road with a network of 50
dealerships across the nation. The NCR region may have four dealerships.
There are already
very renowned motorcycle brands in India, both Indian and global. What will the
USP be for UM to in the market? Would it be the price point, quality or/and
performance?
We are a global company and selling in over 30 countries
competing with same global and Indian brands. By pushing the boundaries
innovation and by providing exhilarating design we will give most innovative
products with latest technology at affordable. There is enough space for a new
player like us as consumers wants choice and something different than what they
already have.
Since the bikes will
be made at the Lohia plant in Kashipur, what is the investment that is being
done there to set things up? What will
be the initial installed production capacity for the bikes? Will the bikes be
brought in CKD form or will it have some of localisation?
UM Motorcycles will be assembled at Lohia Auto’s plant in
Kashipur, Uttarakhand. The plant has an installed production capacity of
100,000 motorcycles per annum. Initially, the more critical parts of the
motorcycles will come from UM Motorcycles USA. The India unit will also be an
export base for UM Motorcycles in AMEA region. UM has signed a strategic joint
venture with Lohia and the initial investment in the joint venture is of Rs 250
Cr (Rs 125 crore each) and then increase it to Rs 500 crore by next year.
How many bikes do you
hope to produce and sell in the first year and subsequently? Has the company
set any sales target?
We are looking to be substantial player and targeting 5pc
market share in the range of 300cc to 500cc and to reach 15pc in next three
years. We hope to launch our bikes around September 2015, with a new bike to
subsequently enter the market every 6 months. We hope to bring a second round
of models to India around the Indian Auto Expo 2016, priced in the Rs 1.20 lakh
to Rs 1.50 lakh (on
road) range.