Survival of the fittest: Premium motorcycle OEM’s in India — I

The trigger for writing this has been the news of Harley-Davidson exiting the Indian market. For any bike enthusiast, this is not good news and proves the point about how difficult it is to crack the Indian market (although things have changed a lot over the last decade especially for premium motorcycle manufacturers). I am not going to dwell upon the macro economical factors which lead to this but instead focus on what I think the OEM’s should do in their individual capacity to be successful.

The first thing that comes to everyone’s mind is the product. Well, that is the core component of it all but let's put that away for now. If we put ourselves in the shoes of a prospective user (I say user as you don't need to own to use a product, not anymore at least!), the first thing we would probably do is narrow it down to a segment of motorcycles that we are looking out for and a vague budget. This could be broad and typically the users tend to base it on their perspectives.

Let's understand this word “perspectives” a bit better, perspectives are based upon a lot of things like brand image, commonality, peer feedback, media, and cult values. Some examples of perspectives could be things like “Cruisers are for short people” “High displacement bikes are hard to ride” “Sportbikes are expensive to maintain” and so on.OEM’s cannot influence this directly but can surely change it by being consistent over time. It's important to portray the right and focussed picture through all forms of media and branding. For e.g.- Bajaj has been portraying itself as a performance machine through all its ads and positioning. This is aimed at exciting the younger crowds and their performance motorcycles may not be a choice for someone in their late 30’s who is more worried about safe motorcycling than anything else. It would be difficult for Bajaj to change this perspective overnight despite their product performance.

The next step for the user would be to do a literature survey. This would be probably online and based on an endless number of media as well as user reviews. The latter has been gathering more momentum in recent times as it throws light on ownership aspects as well. The gadgetry/paper specs of the product would also play a role here to influence prospects. The official media channels are gaining traction and help the fanbase as well as prospects remain interested in the product/brand. It helps for the manufacturers to be the least controversial and approachable in this aspect. Most premium manufacturers suffer from bad reviews due to their skinny and mostly arrogant dealer networks which along with poor supply chains complicate issues further. Well, one thing is for sure that scale will certainly help scale, but besides that the OEM’s need to show more ownership of the customer satisfaction and not leave it to the hands of their dealers.

In the next step, the user has more clarity of thought and has shortened to a couple of probables. Everything up till now is part of marketing and if the product has made it till now it needs a round of applause. It is great if the companies can help the user make his/her decision online instantaneously but it's easier said than done especially with something as personal as a motorcycle in the premium segment. Therefore the OEM’s now need to make efforts to convert the prospects into sales.

The best solution for the OEM’s is to develop a multipronged strategy. They should definitely stick to their traditional methods of relying on their dealers to pursue leads from websites, to set up displays, and to prove test rides. But every OEM is doing the same and to differentiate they probably need to go beyond this. Their approach should be to sell an experience rather than a product. This reprioritises the elements. There are multiple ways in which the customer can be pleased and a lot of it can be achieved with technology and partnerships which surprisingly few companies have adapted too. Some of the things which can create the nudge are as follows —

1. Alternative Ownership Models — The expectations have changed and the younger generations are no longer particular about owning a product they use. Premium motorcycles may also not be used on a regular basis by owners. So the companies should strive to provide options ranging from long term leases to daily rentals to shared ownership. This takes away the cost from the decision making equation and provides more flexibility.
2. Experience — This is a broad term and encompasses everything from the showroom layout to assistance offered by the employees. The OEM’s should strive to have the customer’s well informed much before their arrival at the dealership. The dealership experience should be at par across the various locations(maybe they can pick a thing or two from fast-food chains). Use of technology would help customers get information on the product as well as in scheduling their visits (Don’t think COVID-19 is going to go for a while so all the more necessary.) The dealers and OEM would also gain from increased information about the customers.
3. Customisation — The aftermarket modification market in India is huge and one reason for this is that OEM’s offer limited accessories at exorbitant prices. RE has a lead on this and has an impressive lineup of accessories and even apparel! Dealer end customisations allow the manufacturer to still have a standardised vanilla product for manufacturing which can be topped up at the dealership.
4. Engagement — As I started out especially with premium motorcycles you are selling an experience and not just the product. It’s important to engage the customers this could be through souvenirs, photo ops, rides, and track/trail experiences. The engagement is something that should start early (possibly at the time of first interaction) and continue through till the end of the ownership phase.

If you have mastered these things the chances are that any further decision dilemma relies on the product and ownership which will be talked about in the next part of this article. Stay tuned…