There is a huge potential to expand our sourcing from India

Written by Shweta Bhanot | Malabika Sarkar | Malabika Sarkar | Updated: Nov 15 2009, 03:16am hrs
Amid the general market slowdown, the last one year had some good news for bike enthusiasts in India. A gamut of sports bike makers made a beeline for the country. One such is Bologna (Italy)-based Ducati Motor Holding. It forayed into the Indian market last year through its sole importer in the country, Precision Motor India. FEs Shweta Bhanot and Malabika Sarkar caught up with Cristiano Silei, global vice-president sales and marketing, Ducati, for his views on the companys strategy going forward. Excerpts:

How difficult has it been to strike a connect with customers amidst the global economic meltdown

The global market has been difficult and we have adjusted our strategy to go along with the changing dynamics of the markets. While on the one hand we have been looking to strengthen our position in our traditional markets including Italy and the US, on the other, we are trying to develop new markets such as China, Vietnam and India. The US has been relying heavily on credit and has been significantly impacted by the recession. We are preparing our strategies for the emerging markets and see potential in this region. Nobody can predict how the economic environment will shape up.

However, we are clear with our agenda to strengthen our distribution network. Overall, there has been a 15% drop in our sales across our markets. While Japan has been hit like the US, the former along with Australia are mature markets and we are growing well there. In India, we have already received 300 enquires. The bikes range between Rs 9.66 and Rs 43.36 lakh (ex-showroom India).

You forayed into India in 2008. Why did it take you one long year to set up the first showroom in the country

We made conscious decision not to deliver our motorcycles until we had the complete infrastructure in place that could provide both sales and after-services to customers. We also wanted to open showrooms in Mumbai and Delhi almost simultaneously.

How do you plan to cater to the concerns of bike enthusiasts who are looking for a reliable after sales service offering

This is one of the reasons why we did not deliver the bikes earlier. We wanted to put in place the complete infrastructure before going full swing in the market.We will have a national level aftersales network. All the dealerships in the country will also have service arrangements.

How many dealerships do you plan to open by next year and what is the kind of investment lined up for India

We will have dealerships across all metros by 2010. We are investing in our distribution office through local and foreign funds, while our dealer partner will be putting in the specific dealerships. Typically, the investment in opening a dealership will be around Rs 1-2 crore.

We have started training our dealers here so that the level of service is on par with global standards. It has been a challenge but we are coping with it.

Has the company undertaken any price adjustments given the slowdown

Prices across the world remain on par and we did not undertake any price adjustments specifically to deal with the recession. Other than varying the import duty, the company does not undertake independent pricing policy for specific markets. It will be worthwhile to mention here that the import duties in India are very higharound 115%which make the access of certain products in the market impossible and some correction is needed.

Any plans of sourcing components from India

We have been sourcing from India for the last five years.

Harley Davidson has just entered India. What kind of threat and opportunity do you therefore see

At the current stage of development of the Indian market, the presence of other relevant international brands is a great opportunity. As a matter of fact we would like to think of co-operation instead of competition.

How many more showrooms are you planning to open in India

We plan to open the next showroom in Delhi in December. In 2010 we plan to set up six dealerships in the other metro markets including Hyderabad, Bangalore, Chennai and Kolkata. We will evaluate openings in second tier markets later.

What kind of volumes do you expect out of the Indian market

We are coming to India with an open mind and expect to do 100 bikes in the first year.

As the company says owning a Ducati can be so much more than riding a motorcycle. What are your merchandising plans for India

We will offer all our merchandise through our Ducati stores as they are available globally.