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OEMs seek to increase foothold in India – June 5, 2006

June 5, 2006
Filed under Features

Japan’s Yamaha Motor Co. Ltd. is lobbying the Indian government to change federal regulations that bar the import of motorcycles powered by engines with displacement of over 500cc.
India’s 6-million-unit-a-year motorcycle market is the largest after China, but there are no local products in the above-500cc engine range — Royal Enfield’s Bullet is the only 500cc product offered. Plus the Automotive Research Association of India (ARAI), the only homologating agency, does not allow bikes above 500cc to be imported.
According to a Yamaha spokesperson, Yamaha is talking to the government and the ARAI for clearance to allow such models to be imported into India as completely built units. Automobiles priced above $40,000 in India are supplied a similar special no-homologation clearance.
“We have been talking to them for five months and asking them to allow high-end bike homologation and no-homologation requirement for bikes above the 250cc category,” Atul Gupta, associate vice-president (sales & marketing), Yamaha Motor India, told New Dehli’s The Economic Times.
Yamaha Motor India Pvt Ltd., the Indian unit of Yamaha Motor Co. Ltd., sold 250,000 motorcycles in India last year. The company has the capacity to produce 400,000 units, but plans to invest $66.8 million in its business over the next three years to grow production to 600,000 units annually by March 2007.
SUZUKI
Suzuki Motor Corporation also is planning to increase its business in India, through Suzuki Motorcycles India Private Limited.
Suzuki Motor Corporation holds 74 percent of Suzuki Motorcycles India Private Limited, with the remaining 26 percent held by Satya Sheel, the managing director of the company. “We are also looking at getting international motorcycle models to India,” Sheel told Reuters during a recent interview.
Capacity at Suzuki’s new manufacturing plant in India is 100,000 units a year, but will be increased to 180,000 units between August and September, then stepped up every year as demand grows, Sheel said.
HONDA
Honda Motor Co. Ltd. President and CEO Takeo Fukui recently said Hero Honda in India is planning to increase capacity of its existing line by 450,000 units as well as build a new plant with annual production capacity of 450,000 units. As a result, annual motorcycle production capacity in India will increase by an additional 900,000 units to 5.2 million units by 2007.
Hero Honda sold 1,022,823 two-wheelers from January through April, up 11 percent compared to the same four-month period in 2005.
EXPORTS
India’s exports of two-wheelers in 2005 jumped by more than 40 percent compared to 2004. Neighboring Southeast Asian nations are the chief destination for exported bikes, most of which were accounted for by units with engine capacities of between 75cc to 125cc.
Domestic manufacturer Bajaj Auto Ltd. led overseas sales in 2005 by shipping 165,288 units; followed by Hero Honda, 92,666 units; and Yamaha, 55,063 units. psb

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