Motorbikes constitute about 81.5% of the total two wheeler market in India.

There has been a

perceptible shift towards motorcycles because of better styling, high fuel efficiency, reduction in the
price differential between scooters and motorbikes and higher load carrying capacity. The domestic
sales of the motorbikes grew from 2887194 in 2001-02 to 5815417 in 2006-07(Annexure 1).

The major players in the motorbike market are Bajaj Auto, Hero Honda, TVS motors, Royal Enfield,
Yamaha motors, HMSIL and Suzuki motors. Hero Honda alone sells more than half of the bikes sold in
India. Company wise total sales of motorbikes is given in Annexure2

MARKET SEGMENTATION

Market segmentation is the process of dividing a market into groups of segments having similar wants.
It enables a marketer to take a heterogeneous market, a market consisting of customers with diverse
characteristics, need, wants and behavior, and carve it up into one or more homogenous markets which
are made up of individuals or organizations with similar needs, wants and behavioral tendencies. It not
only benefits the firm but consumer as well.

Market segmentation in the motorbike industry is done on following basis:

A. GEOGRAPHIC SEGMENTATION

Rural and Urban market:

According to the 61st round of National Survey Sample for July 2004 – June 2005, motorcycles were
possessed by 7.7% of households in 2004-2005 which had increased to 15% in 2007-2008.

Motorbikes in the rural segment belong to entry level segment (100 - 125 cc), major player being
HERO HONDA. Hero Honda's share of rural sales has gone up from 38 per cent in 2007-08 to 40 per
cent in 2008-09.
In late 2007, Hero Honda launched a rural campaign called "Har Gaon, Har Aangan (every village,
every home)" which helped increase its sales.
The bikes in this category are: HHML Passion Plus, Splendour Plus, Hero Honda CD Dawn.

The urban market is divided into Tier I, Tier II, Tier III, Tier IV cities on the basis of population and
geographic size.
The sales and the variants of the motorbikes vary accordingly in these four types of cities.

• Tier I constitutes the six metropolitans in India at present and remains the centre of economic and
financial activities. In the metropolitan cities, mostly the bikes which have high performance
level are sold as compared to other cities where affordability factor is also taken into account. In
Tier I cities such as Mumbai, the motorbikes such as Hero Honda Karizma, Pulsar 180, etc are
preferred.
• In Tier II cities, motorbikes such as Pulsar 150, Hero Honda Passion and TVS Star are sold more.
• In Tier III the trend is of bikes such as Honda shine, Kinetic velocity.

The total sales of motorbikes in these cities are given in Annexure3.

B. DEMOGRAPHIC SEGMENTATION:
The segmentation variables for demographic segmentation in the motorbike industry include age,
family life cycle, monthly income, generation, occupation and social class.
The market caters only to the male segment. These variables are easier to measure and on basis of
these one can estimate the size of markets which serve as a key indicator for distinctive markets.

To better understand this segmentation, a survey was conducted in the various showrooms
located in Delhi and NCR

Yamaha Motors
R15 FAZER FZS FZ-16 GLADIATOR
Age 19-28 yrs 19-28 yrs 19-28 yrs 19-28 yrs 20-39 yrs

Family life Bachelorhood, Bachelorhood, Bachelorhood, Bachelorhood, Bachelorhood,

cycle young young young young young
married married married married married
couple couple couple couple couple,
professional
Monthly > 50000 18000-30000 13000-18000 13000-18000 10000- 13000
Income
(Rs)
Occupation Student, Student, Student, Student, Student,
Young Young Young Young
professional professional professional professional,
executives
Generation Gen MTV Gen MTV Gen MTV Gen MTV Gen x

Social class Upper upper Upper middle Upper middle Upper middle Upper middle
class, lower class, lower class, lower class, lower class
upper class upper class upper class upper class

Hero Honda Motors Ltd.

Glamour CBZ-Xtreme Hunk Karizma

Age 23- 40 YRS 19- 40 YRS 19-35 YRS 19-26 YRS

Family life cycle Bachelorhood, Bachelorhood, Bachelorhood, Bachelorhood,
young married young married young married young married
couple with couple, young couple couple
children married couples
with children
Monthly income 10000-13000 12000-15000 15000-18000 20000-25000
Occupation Professional Professional, Student, Young Student
student professional
Generation Gen X Gen X Gen MTV Gen MTV

Social class Lower middle Upper middle Upper middle Upper middle
class, upper class class class, lower upper
middle class class
C. SEGMENTATION BASED ON BENEFITS SOUGHT BY THE BUYERS:
Benefit segmentation is based on the assumption that the benefits a consumer expects out of the
product are the basic reason for the purchase.
The customers can be grouped as per the basic reason of their purchases i.e. it involves classifying
buyers according to the benefits they expect from the product.

MOTORBIKE PERCIEVED BENEFITS

BRANDS

BAJAJ AUTO Brand name, Efficient service, Easy maintenance, Sleek model, High pick-up,
Mileage, Power
HERO HONDA Fuel efficient, high pick-up and stylish, brand name, mileage
TVS MOTORS Low cost
YAMAHA Stylish, high pick up, comfortable, power, High performance
MOTORS
ROYAL Sturdy, comfortable for long rides, high resale value, power
ENFIELD

Benefit segmentation can also be done on the basis of engine capacity because as engine capacity
increases, power also increases and so does the fuel efficiency. The engine capacity in the
motorbike segment has been demarcated on the basis of Cubic Capacity.
The different capacities are: less than 100cc, 100-150cc, 150 -180cc and greater than 180cc. The
bikes under these categories have been listed in Annexure 4.

• Features of motorbikes less than 100 CC

Motorbikes in this segment contain a 4 stroke, single cylinder engine that delivers approximate
output of 7.0-8.0 Brake Horse Power (BHP) with 7200-8200 Rotations Per Minute (RPMs). The
100 CC motorcycles in India consist of those bikes which offer great value for money advantage.
These bikes attract mostly the office goers who want maximum fuel-efficiency with minimum
price that may start from Rs.32000-35000 approximately. These bikes are also used by the fast
food chains and courier services for delivering purposes.

• Features of 100-150 CC motorbikes:

The motorbike market in this segment in India is very stiffly competitive and its players like
Bajaj, TVS, Hero Honda launch their bikes with comparatively attractive design and sporty
features.
A motorcycle of 125 cc delivers an approximate output of 8.0-8.5 BHP with 8300-8500 RPMs.
These bikes also offer fuel-efficient performance but also bear a higher price tag.

• Features of 150-180 CC motorbikes:

These bikes are relatively bigger in size, having sporty looks and high performance. Bikes in this
segment deliver 13.5-15.5 BHP of power with 8500-10000 RPMs. These motorbikes attract
young riders passionate for style and performance. Motorcycles in this category host lots of
sporty features like: sporty aerodynamic looks, large fuel tank, robust on road presence, large
alloy wheels etc.

• Features of motorbikes more than 180 CC:

These motorbikes also attract young riders passionate for style and performance. Motorcycles in
this category host lots of sporty features like: sporty aerodynamic looks, large fuel tank, robust on
road presence, large alloy wheels etc.
The bikes in this segment have created a niche market in India that attracts those bike enthusiasts
who want ultimate biking experience.
 D. SEGMENTATION BASED ON PRICE PREFERED BY BUYERS:
Motorbikes can be segmented into three categories. (Annexure 5)

I. ENTRY LEVEL SEGMENT:

These include motorbikes with price less than Rs. 40000 that typically have engine displacements
less than 125cc. Hero Honda Motors is the undisputed leader in this segment. This is the largest
segment, accounting for 80% of the domestic motorbike sales.
The motorbikes in this category are: Hero Honda CD-Dawn, Hero Honda CD- Deluxe, TVS Star
etc.

II. EXECUTIVE SEGMENT:

Motorbikes with price range between Rs. 40000 to 70000. Hero Honda dominates this segment
with a market share of ~70% followed by Bajaj Auto (20%), HMSI (~6%) and TVS Motors (1%).
This segment retrieves higher revenues from the rural areas, which are less dependence on
finance; therefore comparatively it is among the best performing segments. The bikes in this
category are: Glamour 125, XCD 135 Bajaj Discover etc.

III. PREMIUM SEGMENT:

Motorbikes with price range greater than Rs.70000. The premium segment focuses more on
technology and flamboyance. The motorbikes in this segment are:
Hero Honda Karizma, Hero Honda Hunk, Bajaj Pulsar 220, Yamaha FZS, Yamaha R15,
Yamaha Fazer, Enfield Bullet 350, Bullet Electra, Bullet Thunderbird, Bullet 500.

E. PSYCHOGRAPHICS SEGMENTATION

This includes the segmentation on the basis of Lifestyle and Personality. Motorbikes are bought
according to individuals taste and lifestyle.

I. LIFESTYLE
Lifestyle affects one’s purchase decision significantly. Hero Honda has a wide range of sub-
brands.
• Hero Honda Karizma is meant for youth who wants a stylish bike with high performance
while Hero Honda Passion aims at the individual who has affordability, comfort and
mileage on his mind.
• Similarly Yamaha FZS aims at students who wish to use their bikes only for small
distances whereas Enfield Bullet is for the consumers who wish high power and travel
long distances.
• Adventure seekers who enjoy traveling on motorbikes prefer Royal Enfield Bullet, Bajaj
Avenger,Yamaha Fazer.
• Racing Enthusiastic would prefer Yahama R15 and TVS Apache RTR
II. PERSONALITY
Personality of an individual also defines what product and brand to choose to a certain extent. A
person who perceives himself to be very bold desires a high performance and power bike which
enhances his personality A prime example for this case may be Bullet, Hero Honda Hunk.
Similarly a person who desires style, prefers bikes like Hero Honda Karizma, Yamaha FZS etc.
 POSITIONING

Points of Parity

• Sporty Design.
• 13.5 -15.5 BHP (Power).
• Aerodynamic looks.
• Broader, Stylish and Larger capacity Fuel Tanks.
• Larger Alloy Wheels.
• LCD Speedometer Display.
• High Performance: 4 stroke, 150 cc engine.
• Digitally Operated Spark Plug.
• Strong on Road Presence.
• Brakes: Disk (Front) / Drum (Rear).
• Sporty and Bigger Silencer / Mufflers.
• Flaring Headlamp.
• Funkier and Trendy Dual shade with body graphics.

Points of Disparity

1. YAMAHA FZ-S

Tagline: “Lord of the Streets”;

“Highlight your Style.”

Focus: Youth looking for distinctive style backed by performance

Positioning Strategy:
Yamaha Motorcycle India is shifting its focus from commuter bike segment to sporty, well
designed powerful motorcycles targeted at biking aficionados. In January 2009 Yamaha
launched the muscular FZ-S.
FZ-S highlights the style quotient and has more flesh to flaunt with purely European international
design, new colors & graphics, aerodynamic chiseled windshield, stylish & sporty carbon pattern
meter consol, and more aggressive looking headlight.
Designing based on “Triple Macho Concept”.
• Muscular silhouette
• Muscular body parts
• Muscular chassis
FZ-S scores high in looks not only in its segment but beyond and is designed to satiate the need
for style and fashion by riders. FZ-S is etched with style and geared to today’s fashion conscious
customers. FZ -S reflects visual expression of performance.
 The company emphasizes on functional beauty. The bike was able to cut through the “noise”
because of its very distinctive looks and good performance. The bike scores very high on style
and also the performance to match. Bike is targeted at youth aspiring to set themselves apart on
style.

2. YAMAHA FAZER
3.

Tagline: “Touring spirit-open your horizon”

“Let the weekend never end”

FOCUS: Urban youth looking to explore the outdoors.

Launched in 2009, the bike has been positioned by the company as an internationally acclaimed
sports- tourer, designed to fulfill the needs of the adventurers and explorers.
The bike is essentially similar to FZ-16; apart from 2 modifications done on the original FZ-16.

• Flaring New Headlamps and newly designed Rear View Mirrors – The former to give a
distinctive look, so as to differentiate it from the other Yamaha Offerings, and the latter to
provide more safety with a better rear view.

• The second major difference is the riding position, FZ-16 being a sporty bike has a
forward – bent stance, which gives a sporty look and feel, however this is not ideal for
touring. Whereas in FAZER, the handle bar has been raised a few notches higher, to
provide a straighter, more comfortable riding position, well-suited to the needs of a tourer
(travelling long distances).

The bike is targeted at urban youth looking to break away from the rut of the city. The Fazer ad
shows working professionals skipping work to explore the outdoors on their bike.

3. YAMAHA R15

Tagline: “RACING INSTINCT- Passing on the “R series” DNA”

FOCUS: High technology racing performance bike for racing enthusiasts.

The Yamaha R15 was designed by Yamaha exclusively for the Indian market. The bike was
launched in June, 2008. R15 was created to lead the Super Sport category in India.
The bike comes with a number of firsts for the Indian bike industry.
• Delta Box Frame- Moto GP Design for excellent rigidity, balancing and maneuverability.
• Linked Type Monosuspension: For greater stability.
 • Liquid Cooled Engine: Used in MOTOGP to maintain constant temperature and to ensure
higher engine performance.
• Forged Aluminium Piston: Light weight, toughened, all-aluminium body reduces friction
and leads to better cooling.
• Fuel Injection System: Electronic fuel injection.
Yamaha has gone a step ahead and has also launched R-15 merchandise ranging from R-15 T-
shirts, Helmets and Riding Gear to R-15 Key Chains.
R-15 is the most technologically advanced indigenous bike. All this technology gives R-15 a
definite edge over others and makes it the best racing bike in the market.

4. HERO HONDA HUNK

Tagline: “Because Muscles Matter”

Focus: A well designed product for bikers who want the feel of a BIG bike.
The hunk has been styled to give it a big bike presence by providing fake air scoops at either
sides of the fuel tank. It also features an aggressive visor and muscular rear cowls. The company
talks about the following features with adjectives like-broad, muscular, brawny, glaring,
aggressive, fiery and dashing while describing its feature.
• Broad muscular fuel tank with brawny shoulders
• Headlight Glaring headlight with aggressively styled visors
• Saddle Contoured sporty saddle.
• Rear Cowls: Muscular Rear Cowls.
• Fiery red chrome ringed speedometer
• Silencer: Dashing Inclined Muffler.
The product has been positioned as a muscular, powerful, aggressive bike.

5. TVS APACHE

Tagline: “Racing DNA Unleashed”

FOCUS: A bike designed especially for racing enthusiasts.

Positioning Strategy: Powerful, racing bike.
TVS Motors launched Apache in the market as a bike which sported features that emulated racing
bikes, designed to fulfill the racing desires of the younger generation.
The bike is primarily designed with a racing approach encapsulating the following features:
• Lap Timer
• Provision for the last three 0–60 km/h timings.
• Petal Disc Brake
Keeping in tune with its marketed product and Tagline, TVS has launched an ARE (Apache
Racing Experience) which includes Dirt Racing , Circuit Racing Tutorials and a hot lap
competition , thus providing an opportunity to race enthusiasts

ANNEXURES

ANNEXURE 1

Trends of Sales of two wheelers in India

Category 2001-02 2002-03 2003-04 2004-05 2005-06
Scooters 908268 825648 886295 922428 908159
Motorcycles 2887194 3647493 4170445 4964753 5815417
Mopeds 408263 338985 307509 322584 332741
Grand Total 4203725 4812126 5364249 6209765 7056317

Share of Domestic Motorcyces Sales

2003 2004 2005 2006 9M 2006 9M 2007

Motorcycles 75.8 77.7 80 82.4 82.3 84.1
>100 1.1 0.6 0.3 0 0 0
100-150cc 65.5 68.2 67.3 68.2 68 67.1
150-180cc 8.7 8.4 11.9 13.8 13.9 16.5
>180cc 0.6 0.5 0.5 0.4 0.4 0.4
 90

80

70

60
Motorcycles
50
>100
40 100-150cc
30 150-180cc

20 >180cc

10

0
2003 2004 2005 2006 9M 2006 9M 2007

India Motorcycle Production, Domestic Sales and Exports

Production Domestic Sales Exports
2006 2007 Growth 2006 2007 Growth 2006 2007 Growth
Motorcycle
s 4555 5418 18.9 4283 4960 15.8 283 421 52.3
<100cc 0 0 1 0 0 0
100-150cc 3737 4256 13.9 3538 3961 12 201 297 44.1
150-180cc 797 1138 42.9 724 976 35 80 122 79.6
>180cc 22 24 8.8 20 22 8.4 2 2 9.8
 100%

80%

60%
>180cc
40%
150-180cc
20% 100-150cc
<100cc
0%
2006

2006
Growth
2007

2006

2007

2007
Growth

Growth
Production Domestic Sales Exports

ANNEXURE 2

Trends in Domestic Sales and Market Shares

Domestic Sales (Units) Growth (%) Market Share (%)
9M 9M 200 9M 200 9M 9M
2006 FY2006 FY2007 6 FY2007 6 FY2006 FY2007
Motorcycl 58154 495986 17.
es 17 4282930 4 1 15.8 100 100 100
289307
HHML 0 2155479 2329158 13.1 8.1 49.7 50.3 47
Honda 98072 72151 107585 51.1 49.1 1.7 1.7 2.2
TVS 752576 546322 650596 17.5 19.1 12.9 12.8 13.1
Yamaha 210417 153370 179932 -1.2 17.3 3.6 3.6 3.6

ANNEXURE 3

State-wise sales of Motorbikes, 1998

Delhi 21,060
Himachal 480
Pradesh
Jammu & 1537
Kashmir
Punjab 26124
Haryana 37,090
Chandigarh 2,271
Rajasthan 80,590
Uttar Pradesh 1,15,283
Assam 5,363
Bihar 33,949
Orissa 21,015
West Bengal 75,845
Goa 6,965
Gujarat 1,42,448
Madhya 1,17,275
Pradesh
Maharashtra 2,02,466
Andhra 64,090
Pradesh
Karnataka 86,885
Kerala 60,072
Pondicherry 2,062
Tamil Nadu 1,46,330
Other 16,969
Total 12,66,169
 ANNEXURE 4

Motorbikes listed according to engine capacity

Less than 100 CC

› Bajaj Platina › Hero Honda CD Dawn
› Hero Honda CD Deluxe › Hero Honda Passion Plus › Hero Honda Splendor +
› Kinetic Boss › Kinetic Challenger › Kinetic Stryker
› TVS Centra › TVS Star

100-150 CC
› Bajaj Discover
› Hero Honda Glamour
› Honda Unicorn
› LML Adreno FX
› LML Freedom
› Suzuki Zeus
› TVS Victor
› Yamaha Gladiator
› Bajaj Wind 125 › Pulsar 150 DTS-i UG
› Hero Honda Super Splendor › Honda Shine
› Kinetic GF 125 › Kinetic Velocity
› LML Beamer › LML Energy FX
› LML Graptor › TVS Fiero
› Suzuki Heat › TVS Apache
› Yamaha Crux › Yamaha Enticer
› Yamaha Libero G5

150-180 CC
› Bajaj Avenger › Bajaj Pulsar 180 DTS-i › Hero Honda Achiever
› Kinetic GF Laser › Kinetic GF 170 -

More than 180 CC

› Hero Honda Karizma › Kinetic Comet › Kinetic Aquila
› Bullet 350 › Bullet 500 › Bullet Electra
› Bullet Machismo › Thunderbird -

ANNEXURE 5

Motorcycles: Economy vs Executive vs Premium

Target Income Price Range Fuel Efficiency
(Rs.)
Economy Low <40000 High
Executive Medium 40000-70000 High
Premium High >70000 Moderate

Economy Motorcycle: Market share of key models (April 09)

Market
Share
(%)
CD
Dawn 35.9
Platina 29.6
Star 26.5
 Economy Motorcycle
Market Share (%)

40

20

0
CD Dawn Market Share (%)
Platina
Star

Executive Motorcycle: Market share of key models (Apr 09)

Market Share
(%)
Splendour Plus/Super
Splendour 43.8
Passion/Passion + 29.3
Discover 5.1
Glamour 125 5.6
Shine 6.7
XCD135 5.4
CBF Stunner 1.8

Premium Motorcycle: Market share of key models (Apr 09)

Market
Share
(%)
Pulsar 30.6
CBZ X-
treme 15.7
Unicorn 11.9
Apache 9.8
FZ16 8.9
Hunk 8
 Bullet 4.9
Karizma 2.9

Premium Motorcycle Segment

Market Share (%)
35
30
25
20
15
10
5
0
Pulsar CBZ X- Unicorn Apache FZ16 Hunk Bullet Karizma
treme