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Business – Two-wheeler makers ‘Discover’ new ‘Passion’ for rural market

Meera Mohanty

Manoj Bansal recently changed his two-year-old Splendour for a new Passion Pro at the Hero Honda dealership in Sardhana, a small town about 20 km from Meerut, Uttar Pradesh.

“I had to move on to a sturdier bike. I have gained weight after all,” says the sugarcane farmer and a Bahujan Samaj Party worker.

The poor monsoon has reduced the yield but with the prices of sugarcane expected to be higher, Bansal hopes to earn about Rs 1-1.5 lakh this year.

Farmers of Sardanah are expecting sugarcane prices of Rs 170-220 a quintal, significantly higher than last year.

Bansal is the kind of prospering “opinion leader” that India’s largest two-wheeler company is looking to tap.

Rural markets today contribute about 40 per cent to Hero Honda’s sales, and the company hopes to improve that.

Rural market

With two-wheeler penetration levels at less than 10 per cent in rural households, it is a large market waiting to be tapped, says a company spokesperson, adding that Hero Honda is mapping the demographic and psychographic landscape of Rural India.

In Sardhana, which has a 19th century Basilica built by the courtesan-turned warrior and mercenary queen Begum Samru, professional ear-cleaners are at work on verandas outside shops stashed with DTH boxes.

It is a sleepy town surrounded by sugarcane fields and mango groves, and two bike dealerships located within 100 m of each other on the main market street. If you don’t like one dealer you can go to the other. And that’s why childhood buddies Rupesh Chowdhury and Ojaswi Ram are now back at the Hero Honda showroom.

Though they had originally planned to buy a Discover 135cc, they didn’t like the sales pitch at Bajaj, but are determined to go home with a bike today.

“It’s an auspicious time for big purchases, and it’s a lucky day for my friend here,” says Chowdhury.

His red Hero Honda Glamour was a gift from Ram when he couldn’t afford one, and Chowdhury is returning the favour today.

Harvest purchases

Demand during the ongoing festival season is buoyant, says Mr Milind Bade, General Manager, Marketing, Bajaj Auto.

“We will have to wait for a couple of months to see if the impact of poor monsoon leads to a tapering off in sales by the end of the year.”

Purchases are now being met from the rabi crop in April, and further sales will depend on the kharif harvest. From a growth of 17 per cent, the two-wheeler industry could settle at 11-12 per cent this year, he says.

Satyendra Tyagi hasn’t had a very healthy crop this year, but he’s done well as a milkman. He employs two people, and recently bought three buffaloes. Unlike Chowdhury, he likes Mr Navneeth Garg who owns the Bajaj dealership. “Honda’s bikes are better. But I’ve already ridden a Splendour, and for a change I’ll go with a Discover,” he says, waiting for the first free service.

Tyagi is less forgiving of the “Government which does nothing to improve rural roads, and goes about forgiving defaulters who don’t work to pay back their loans.”

The Discover is a portfolio gap-filler for Bajaj which only had the Platina at the entry level.

The brand has been a great success, selling 94,000 units in September alone, making it the third largest in the last two months, claims Mr Bade, estimating that half of these numbers would come from smaller towns.

“Rural India is now seen as a significant part of the economic growth only because it has been left behind till now. The trickle-down effect and the impact of programmes such as NREGA are being seen. Last year, rural India sustained the economy while urban consumption came down during the slowdown, but let’s not forget that 30 per cent of India still accounts for 60 per cent of consumption,” points out Mr Venu Srinivasan, Chairman and Managing Director, TVS Motor Company.

With the exception of the Italian-style Basilica of Our Lady of Graces, Sardhana has little to boast about. “There is no electricity for hours. The yam and textile mills have moved to Meerut, and along with them many of the young hands,” says Satyaprakash, an elderly shop-owner.

More wheels

Chowdhury and Ram have several failed businesses behind them. Five years ago, they tried their hand at a cable business. But the additional expense of running a generator didn’t make it viable. Next came a plastic pipe unit for which they even sold their common investment, a Santro that they used for picnics. That failed too. Ram runs his family’s goldsmith business and Chowdhury is back to sugarcane farming.

What has changed is people’s propensity to spend, says Garg. But the number of cars in the village is going up; and while Tyagi moves to his second and third bikes, for Mohammed Hussain (name changed), a poor farmer from Nainaputhi village, it’s the family’s first purchase of a two-wheeler.

He has come to the Hero Honda dealership to buy a vehicle for his Delhi-based son-in-law, with cash in a cloth bag. The cash comes from his savings; money for the marriage will have to be borrowed from his relatives.

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October 14, 2009 - Posted by | Uncategorized |

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