In first gear

New Delhi, June 27: Around 20 per cent of the new motorcycle-owners plans to upgrade to cars within the next three years, says a recent survey of nearly 6,500 customers.

The survey by TNS Automotive, a leading provider of market information, said customers would opt for small low-priced cars, priced between Rs 2-4 lakh.

“Small car manufacturers would certainly benefit from the rapidly growing base of motorcycle owners,” said Rajeev Lochan, general manager (Asia Pacific) of TNS.

“These trends are indicative of a shift in the market composition and its impact on future car sales,” he added.

The mini and compact car segment in the country make up nearly 80 per cent of the domestic car sales of nearly 8 lakh units in the year to March 2004 driven by robust GDP, low interest rates and attractive discounts.

Analysts, however, expects overall motorcycle sales growth to remain strong, as economic growth of more than eight per cent boosts household incomes and interest rates remain benign.

The survey also said the market is keenly waiting for Honda Motorcycle and Scooter India (HMSI) to launch its motorbikes. “The preference is significant among owners of Yamaha and Hero Honda bikes...Honda's entry into the motorcycle marker would pose a stiff challenge to its competitors,” said the survey.

Honda Scooter, which produced only scooters until now, will begin making motorcycles later this year that has led to fears it will slow Hero Honda's sales growth and eat into its dominant 48 per cent market share.

Honda also owns 26 per cent of Hero Honda Motors Limited, the country's biggest motorcycle maker, and fully owns Honda Motorcyle and Scooter, which is the country’s largest scooter firm.

TNS also said third-ranked TVS Motor Company’s Centra model has earned the highest overall rating from its customers in the executive motorcycle segment based on some of its parameters, including product reliability and product quality.

TVS’ overall rating was a point and nine points higher than Hero Honda’s products — Splendour and Passion Dell —and LML Freedom model respectively.

In the cruiser segment, Royal Enfield Machismo earned the highest points, while in the entry-level segment Hero Honda’s Dawn model clocked maximum points, a full seven points higher than Bajaj Auto’s Boxer bikes.