Sales in the commuter segment has gone down considerably, leading to downturn in the industry.
Suzuki Motorcycle India (SMI) is betting on Asean markets for exports after the introduction of BS-VI emission norms next year. SMI managing director Koichiro Hirao tells FE’s Arun Nayal that customers shouldn’t expect over-the-top discounts this festival season despite slow auto sales. Excerpts:
Suzuki has registered a 16% y-o-y growth in the first five months of the current fiscal when the industry is going through a tough phase. What is going right for you?
Sales in the commuter segment has gone down considerably, leading to downturn in the industry. We happen to represent the positive momentum with our premium segment products. Our existing markets have given us good dividends and we are also increasing our geographical penetration. However, we had budgeted for a much higher growth.
Access 125 is driving sales for you. Are you comfortable with how other models are performing?
Access is the volume brand for us. Having fewer products contributing to large growth is much better than having a large portfolio out of which half of them don’t sell. Access, supplemented with Burgman Street, has given us a 12% share in the domestic market and we believe it can help us add 8-10% more.
When do you plan to convert your fleet into BS-VI?
We will start rolling out BS-VI vehicles from next year. It will increase cost of vehicles by 10-20% and there’s no benefit for the customer. We believe the buyer preference will be for BS-IV vehicles till the March 31 deadline comes. The next financial year will also be difficult for the industry considering that vehicle prices will go up.
How are you boosting exports considering tough domestic market conditions?
Currently, exports account for 10% of our total production. We export to countries like Colombia, Japan, Sri Lanka, Bangladesh and Nepal. With the introduction of BS-VI, we will start exports to the Asean markets as vehicles produced will be of Euro-V emission standards.
Will manufacturers go all-out to woo customers this festival season to push sales?
We don’t think sale would be driven by commercial offerings. There would be discounts more than what there are during the rest of the year. But there would not be over-the-top discounts to woo customers.