India, the New Motorcycle El Dorado?

A few years ago, people thought that China, one of the economies with the largest growth in the world, was to become a major player in the motorcycle industry. However, the last period showed that things are developing in a different manner, with India gaining tremendous momentum in the bike industry.
While some were happy to see the bike prices go down a bit and hoped the new machines would not make huge compromise as far as quality and reliability was concerned, others feared that China was to gain too much power, once yet another foothold was firm.

Taking a look at what happened in 2011 and 2012, we might say that the initial advantage China used to have over India in this respect seems to fade away. With Indian manufacturers Hero and Bajaj being among the top 5 around the world during the last years and the huge domestic market, it was only natural that other top-quality brands became interested in various types of collaboration.

Harley-Davidson, Triumph, KTM, Honda, BMW and recently Victory Motorcycles, they all have ties with India, and are planning to expand the business relationships. If we consider the way things went during the last 5 years, we could safely assume that China will no longer be able to even dream of shaking the Indian supremacy in the bike planetary industry in the near future.

Some wonder why this is happening, and why India has succeeded where China seems to have failed. Far from offering definitive answers, here are a few considerations on the matter.

Tradition, regimes and so on

A lot of people are making decisions based upon past events. Tradition, history and expertise alike are some of the key elements when it comes to deciding which product, in this case – which motorcycle – to buy.

India has been linked to the old British bike-building since the middle of the 20th century, and Royal Enfield still being one of the best-recognized bikes tied to the Indian industry. Skipping the political issues between the British Crown and India (the place of which is definitely not here), the common past experience of the two countries echoes in the present.

India has always been open to new technologies and assimilated everything that seems of importance, under British dominion or by itself in modern days. On the other hand, China has little to brag about in this respect.

Even worse, with a long tradition in a closed political regime and the lack of real communication with the other markets, China has voluntarily “secluded” from the “imperialist oppression”, burning the bridges and denouncing almost all the foreign technology as undesirable.

Unfortunately, the separation all communist countries desperately try to maintain from the “imperialists” brings absolutely no advantage: we've seen pretty much every former communist country in Eastern Europe having a really hard time closing the gap its very history caused.

We see it today in North Korea and the way such regimes simply refuse to acknowledge common sense. Of course, China has changed their ways years ago and in many respects, its economy works pretty much like any modern capitalist economy would... but the awesome chasm established back in the day cannot simply be crossed in 10 years.

Any rider in their right mind would choose an Enfield Bullet instead of a Chinese bike with a virtual “no-name” sticker (still) impossible to shake off. The proven reliability of an old machine weighs much heavier than the pretenses of a copycat motorcycle built in a suspicious plant.

Some give the example of Western/ Japanese high-tech gadgets being manufactured in China and still complying to the strictest rigors. Yes, Apple or Samsung, they're great examples, but their gadgets are manufactured in plants operating under extremely-close supervision and quality checks, a thing that none of the main motorcycle builders in the world is yet capable (or willing) to do.

As for the rest, China is unfortunately linked to the “knock-off industry”. We have to admit it, as harsh as it may sound: China has been continuously copying (or stealing, if you prefer) others' ideas and technologies and was unable to reproduce at least a comparable level of quality and reliability.

This works for smartphones, cars, motorcycles, and pretty much any other consumer goods you might name on an immense list. By all means, it's going to be a while until China shakes off the “fake” fame.

Investments and courage

We could say that the Indian bike manufacturers have also shown genuine courage as they first thought of partnerships with Western brands. The domestic market is already huge, other markets in the vicinity are also showing a massive potential (the Philippines and Indonesia), and the Latin/ South America was also on a rising trend.

They could have made it well with these, but some smart guys figured that the world is changing: technology from the 1950's could not be sold as the latest hit in the business.

Research for developing new domestic engines and vehicles is extremely costly, in both the financial and time registers, so bringing the “big boys” to India was the smartest way to go. These manufacturers believed in the way India could build bikes, whether it was about the old Royal Enfield or the newer Hero or Bajaj.

And they went on, because this obviously was a win-win scenario: the big boys got some of their bikes cheaper and that meant more profit in traditional markets, while the joint efforts were to produce cheap bikes for the Indian and adjacent markets.

That's how Honda, the largest bike manufacturer in the world, jumped in the Hero partnership, more than 25 years ago. Even if Hero has already announced their intentions of severing the entanglement with Honda (a separation most likely to become total in 2014), and is the 3rd biggest bike builder in the world, they did not stop here. In 2012, they also considered investing in Erik Buell Racing, and even if EBR got GE Capital money, there is still room for more.

On the other hand, the other huge Indian bike manufacturer Bajaj has managed to join efforts with world-class brand KTM, buying a 14.5% stake in 2007 and now owning 47% of the Austrian builder's shares.

Today Bajaj makes a lot of money from selling the India-produced small-displacement Dukes. These bikes bring money and respect, as the KTM plant has a lot of native employees and the future plans are looking even better: the all-new KTM 390 Duke is already a sought-after bike in Europe and North America, despite not being even officially launched. We have never heard of too many complaints on the Indian-n made KTM, and most likely we never will.

The rest of the “big boys” trust India

The first big manufacturers to shake hands with the Indians were the Japanese: they were close and they were already selling heavily worldwide. But next to Honda, Kawasaki, Suzuki and Yamaha, new names are coming.

Operations officers from Harley-Davidson, Triumph and Victory are learning how to correctly pronounce the names of their new Indian counterparts. What seemed impossible to fathom no longer than 5 years ago is now happening.

Having H-D and Victory updating plans for strong entries in the Indian market was a terribly funny thought 10 years ago, but today the lights in conference rooms are lit up late into the night and people are building new strategies.

The Milwaukee guys are also going to build a local bike, whereas Victory are slowly making their inroads. The British Prime Minister David Cameron asked Triumph to appoint representatives to join him in a trade mission in India. The recent plans for a small-displacement bike for Asia are clearly showing that Triumph is also willing to make money on less “traditional” markets.

A possible future?

It's easy to figure out that by 2014 we might see a wave of Indian-manufactured bikes with highly-esteemed badges flowing into the local market and abroad, with very few exploits directed towards the Chinese factories.

The recession might have shifted many customers from the very expensive bikes to the more affordable ones with better mileage and so on, but still, they're not willing to spend too much of their money on Chinese motorcycles and seem to favor the Indian ones, whether they're local brands or wear the big boys' colors.

2013 and 2014 will definitely see even more shifting and it looks like they'll be remembered as the small-displacement bike years. China, your move.
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