Similar has been the story of Bajaj Auto in the Indian two wheeler market. Initially Bajaj failed to perceive a consumer swing towards brand consciousness and quality. The flopping of its two old models - the Bajaj Super and Bajaj Chetak-forced it to see the writing on thewall, and it has got its act together. Bajaj's tremendous financial muscle, with over Rs 1300 crore in cash, has proved more than adequate to source and develop technology for its two-wheeler range. Another plus is the company's obvious retailing strength and the almost 100 per cent indigenisation levels achieved by the company. All of which has helped Bajaj ready itself to claw back its lost market share with a variety of new models.

With this in mind, Indian scooter companies need not break into a sweat over Honda's entry. Largely because they already have a headstart over the competition in terms of product portfolio and distribution. This would include the entire complement of products from the Luna variety to stepthrus and scooters. However, what Bajaj, LML and Kinetic need to do is develop ergonomic products, with slick styling, at an affordable price for the quality conscious Indian market. This can easily be done by commissioning any international design house.

But Indian two wheeler companiesneed to take corrective measures to counter balance the shift in two wheeler demand from scooters to motorcycles. This is where Indian companies which do not have Joint ventures with international automotive majors might well lag behind. Especially since, the development of fuel efficient four stroke or two stroke engines in-house is a long and arduous task, involving huge financial and manpower investments. It is in this department that companies like Suzuki, Honda and Yamaha, are already miles ahead. Thus one option which might well become quite popular for Indian two-wheeler companies is the joint venture route with an international major.