M&M looks to buy two-wheeler parts from China

Mahindra & Mahindra (M&M), the country’s leading utility vehicles maker that recently forayed into the two-wheeler space, is exploring sourcing of parts from China.

Talks were on with Chinese vendors, said Anoop Mathur, president of M&M’s two-wheeler division. China is the largest two-wheeler market in the world; India is next. M&M has three 125-cc scooters —two power scooters, Mahindra Rodeo and Duro, and Mahindra Flyte. It plans to launch a motorcycle next year.

The three scooters are priced between Rs 38,300 and Rs 41,300 (ex-showroom, Ahmedabad). Though priced in the same range as Hero Honda Pleasure and TVS Scooty Pep, these are 5-6 per cent cheaper than market leader Honda Activa and have an engine that is 12-18 per cent larger. These are also 8-12 per cent cheaper than Suzuki Access. The company feels the pricing is strategic and sustainable. While Mathur declined to give details, he said sourcing components from China could give M&M an advantage in pricing.

As for the existing Kinetic models that Mahindra now markets, including Nova, Kine and 4S, the company is yet to take a decision on whether to phase out these in the long run. Mahindra had acquired assets of Kinetic Motors in 2008. Kinetic had launched Flyte, with a 125-cc engine, in 2007.

“We want to be present as an end-to-end player in the two-wheeler space and will take a call on these Kinetic models depending on the market feedback. We are looking at positioning our products uniquely,” Mathur said. Currently, it is targeting the adult stylish male for the Rodeo, while the Duro is targeted at the entire family. The Flyte is for the woman commuter.

“In the 40 days since our launch, we have sold around 7,000 units on an average per month”, said Sanjay Mittal, vice-president, sales and customer care, Mahindra two-wheelers. The company has an annual manufacturing capacity of 500,000 two-wheelers at Pithampur, near Indore, in Madhya Pradesh.

Mahindra’s two-wheelers have 325 dealers. The plan is to take this to 375 by the end of the financial year. “Around 200 Kinetic dealers came in and the rest are our existing tractor and utility vehicle dealers,” Mittal said.

The two-wheeler market has been clocking a 15 per cent growth this financial year. The scooters segment is dominated by Honda Motorcycles and Scooters India, which have a 53 per cent share, followed by TVS & Hero Honda with 21 per cent and 14 per cent, respectively, and Suzuki with 8 per cent.