Benelli and Keeway eye India as a manufacturing hub

With more than 13 products in the family, Benelli and Keeway aim to capture a significant market share in the premium Indian two-wheeler market.

keeway

Chinese-owned Hungarian brand Keeway made its India debut on May 17 with its first 3 products – K-Light 250V a 250cc cruiser motorcycle, retro-inspired Sixties 300i scooter, and Vieste 300 maxi scooter – for the Indian market. The brand is owned by China’s Qianjiang Group, the same parent company which owns Benelli. What makes Keeway interesting is the fact that, unlike Benelli India, the company is expected to focus on the 300cc and less segment, an area, where there is growing interest from Indian consumers.  

After almost 7-years of maintaining its presence in India, the company is ready to look at the market beyond just selling the products. In fact, if things go as planned, India could very well become a manufacturing hub for the brands. 

India is home to the world’s fourth-largest automobile market, but when it comes to the two-wheeler segment, the country is the world’s biggest market, which continues to grow leaps and bounds. It comes as no surprise that OEMs big and small are eyeing to grab a piece of the more than a million sales per annum market. 

The 300-500cc a strong forte for Royal Enfield has seen an influx of many new players with the likes of Jawa/Yezdi and Honda entering the market. Rising aspirations, an increase in disposable income and Gen-Z has been key contributors to the growth in the segment. 

Speaking to Express Mobility, Vikas Jhabakh, MD, Benelli India shares that the “Keeway will not enter into competition with the mass manufacturers. We will do 125cc, 250cc and 300cc, which will be the mainstay for Keeway Motors. Maybe in the future, we may look at higher segments, but the immediate focus is on this segment (read sub 500cc). Beyond that, in 500cc we already have the Benelli brand. There is no point competing with our own products. I want customers to come to the Benelli – Keeway showroom and be able to choose from the 12-13 unique products. It does not make sense to showcase a dozen products but only have 5-6 unique offerings. At present, we have 5 products under Benelli, and 8 more will come from Keeway. No other brand in the market can boast that they have 13 unique products to offer.”

While the company has not yet revealed the pricing of the products, Jhabakh mentioned that the Keeway brand will be priced between Rs 150,000 to Rs 400,000. An area where he sees robust demand to come. 

Benelli and Keeway together to bring 25% market share in premium two-wheeler space

It was in 2021, that Jhabakh announced an ambitious plan to grab 25 percent market share in the premium two-wheeler category. And with the launch of Keeway, he is optimistic that in the next couple of years, it maybe very well a reality. 

“The goal post has been put forward. Ideally, our goal and initial target was to achieve that (25% market share) by 2023, but what has happened is that we like everyone else has lost one-and-a-half to two years. And after impacts like the global supply chain challenges, from what I understand that it (supply chain issues) will go on for another year.”

“While it will make things difficult, the target does not change. The launch of Keeway is an important step for us towards reaching the target. I believe by late FY2024 or early-FY2025 we will be able to achieve the target,” says an optimistic Jhabakh.

He believes that the festival season leading into Diwali will be very critical for consumer confidence across the country for any type of consumption. “I believe if we are able to get through this period, we will be back to the kind of growth we were seeing in the pre-Covid era in the two-wheeler segment.”

Manufacturing Benelli and Keeway products in India

On the other hand, localisation remains a key area for most companies to be able to attain sustainable growth. But for most companies, the first step is to achieve an internal target to justify the investments needed. 

While Benelli has been a well-known brand in India, the Keeway brand will need to establish itself and prove its mettle. At present, Benelli India’s assembly plant in Hyderabad has a manufacturing capacity of 30,000 units per annum, which can be expanded to 45,000 units per annum.

Jhabakh is confident that the fit, finish, and experience for the Keeway brand will be similar to Benelli thus giving it an edge in the premium two-wheeler segment.

Responding to a query on the localisation plans, he says at present Benelli is already sourcing parts from around 20-25 suppliers in India. The percentage will increase with volumes.

“While there will be price reduction (on back of localisation), it will not be as extreme as people would like to believe. Because today Benelli and Keeway both being global brands are already sourcing parts from suppliers across the world who give the quality that the company wants at the best possible price. When we do and localise and make Indian vendor’s supply, there definitely will be some reduction but it won’t be up to the extent that some people think of 25-30 percent. It does not work that way. The bigger advantage we will have we can source parts locally which makes production and aftersales easier. You also de-risk and become a little bit more immune to supply chain shocks,” explains Jhabakh.

He further states that when Benelli entered the market, it was a clear understanding that India will play a bigger role in the overall scheme of things. 

“When the time, the number is right, penetration good enough. We want to start manufacturing in India and export. Because we don’t need to prove our manufacturing capabilities, we are the largest two-wheeler market in the world. Why are so many brands coming to India? Because they have realised that to have a significant market share globally, they need to have a presence in India. They have also realised that after sometime they have to manufacture in India. That continues to remain a long-term ambition and goal for us. Off course, the yardstick has moved because of whatever has happened, but we work towards that. At present, our factory can produce 30,000 units a year. When we cross 10,000 units (sales) we can also look at exports. But honestly, to get to exports, we will need to make significant investments it is not as easy as just setting up a new dealer in Mumbai. If we begin manufacturing for Benelli and Keeway for their global markets, there will be investments coming in from them as well. Right now, we are controlling the market for them. That plan has always been there for Benelli for which we have to meet certain yardsticks and plans for them to find it viable. We are building the brand and market up. Their intention is clear they want to enter India. They also understand considering the current economic, and political situation it has been postponed. You cannot fight it, but you must wait for the right opportunity,” concludes an optimistic Jhabakh.

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