The Mileage Mentality Gyaan

Have a look here

Honda published its annual sales volume and have a look at the sheer amount of difference in the number of units sold in Asia as compared to the rest of the worlds. The so called developed nations sales even doesn’t add up to amount of sales that take place in Asia!
And yet our so called Magazine\forum pundits have always preached us that for us to get bigger bikes, the general tendency of ‘mileage’ and commuter class bikes has to go! You really believe that? Does a bike has to be a splendor to be successful, hasn’t the FZ, the Pulsar, the RTR been successful enough! Hasn’t the Ninja, the Yamaha R1 done record sales here?

Do you honestly think that the premium bikes sells in numbers like that! Then why do we believe these imbeciles who preach so! Beats me!

A simple mathematic function P = f(s)
Assuming the cost of delivering the R15 till the Customers door step is say a 85% of the retail price for the manufacturer. This 15% constitutes as profit for the manufacturer, the wholesaler, and the dealer, sub dealer.

So a rise profit happens
1) when they can make the manufacturing cost cheaper and continue sell as many machines
2) when they can sell more with the same manufacturing costs

The revised function is P = f(S, M)

But isn’t there a 3rd outcome possible?
Cant we play on the margin bits?

Make a product which is not exactly in the radar of the competition, price it well, sell may be lesser in numbers and enjoy more margin!
Imagine a Yamaha R400 made in India, priced at say 3Lakhs, and sold to the world. Better still take the example of the CBR250. Made in India (almost) in a SEZ with tax relief for lowering manufacturing costs. It’s a product which doesn’t have any direct completion. The distinct comparison would be a Ninja which is 1/3rd more the price.

So the CBR thanks to its price, will sell a bit more than the Ninja and yet enjoy a handsome premium. Remember the Ninja isn’t being made\assembled in India (yet)

Look at it from a costs point of view… the lower the number, the more the exclusivity, and the lower the headache of after sales support! Imagine Kinetic disappearing after bringing a unknown 250. It did sell well, that’s probably an apt reference to the worst of the after sales support posisble. I am sure, any manufacturer in India could atleast better that! So improvise, ‘make’ bigger machines, sell may be a few, but tap to an new market demand and do justice to that product!

So who knows, may be we have a Yamaha 2XX waiting, which will under cut the CBR and give it a run for its money… who knows may be we have a Pulsar 300 waiting, which will under cut the CBR!
Who knows may be we have a Apache XXX waiting, which will explore a new segment!

The bottom line, the mentality doesn’t need to change. The manufacturers need to smell the coffee beans and pick up a slot and shoot there! So next time someone gives you the ‘gyan’ on the Indian mentality being a ‘mileage’ mentality and what not, give them a reality check. Down here in Asia, there is enough wealth, find a product opportunity, slot it there and do well! Period!

PS: The sooner one realizes this, the better it is for all of us!