Polaris will consider manufacturing in the country: Pankaj Dubey

Interview with Managing director, Polaris India

The $4.5-billion sports vehicle and premium two-wheeler maker Polaris came to India four years ago with its off-road vehicle. It launched premium bikes in 2014. Pankaj Dubey, MD, Polaris India, talks to T E Narasimhan about the company's plans to increase its market share and about the Make-in-India campaign. Excerpts:

It’s been four years since Polaris launched off-road vehicles and over one year since you launched premium bikes in India. How has the journey been?

We have the first mover advantage and have literally created the market here in a manner of speaking. We have laid the ground work and should be able to ramp up operations now. We have Polaris Experience Zones for adventure enthusiasts. We also supply ATVs to government institutions such as police forces and have supplied these to Gujarat, Tamil Nadu, Jammu & Kashmir and Kerala governments. Though the Indian market is  small since ATVs are not road-legal here like in Europe, we expect the market to pick up further going ahead.

Since the introduction of the 'Indian' brand, there has been a lot of excitement among motorcycle aficionados across the country, so we expanded our product range and unveiled the Indian Dark Horse and Indian Roadmaster in May 2015.

How much market market share have you clocked?

In one year, we have managed to grab 10 per cent market share of the luxury two-wheeler market occupied by 1,400 cc bikes, costing above Rs 20 lakh.

India will emerge as the key market for the Indian brand around the world. With the top-end motorcycle segment expected to grow at around 25 per cent CAGR, over the next five years, we will aim at a higher-than-market growth rate. The growth is possible since infrastructure is improving and household incomes are growing.

How is your reach and do you see any synergy or any chance of using Polaris' existing network?

We already have established over 60 touch-points for Polaris in India since the time that we have been here. We also have three dealerships now for Indian Motorcycle. We plan to expand our Indian Motorcycle dealer network to six touchpoints by the end of this year. By 2016, we will have about 12 locations and by 2020 we should be present in around 35 markets. The market expansion will help the company to increase its market share to 20% by 2020.

We focus on utilising synergies between the brands and this reflects in our network expansion strategy. Gurgaon dealer principle owns the Polaris and Indian Motorcycle dealerships for example. Same is the case with the dealership coming up in Ahemdabad. 

Currently the company's bikes are priced between Rs 12 lakh and 35 lakh. Any plans to launch a sub-Rs 10 lakh bike in India?

We are constantly studying the market and our focus and investment in India is for the long-term. So going ahead if the market demands it, we may consider products accordingly.

When can we expect Polaris to start assembling in India?

Right now all our products are coming as completely built up units from the US. So based on the demand, the first thing that we would do is the knock down assembly where the cost will get reduced by 15-20 per cent.

That’s our short-term strategy, i.e. having a CKD model and having a pricing equivalent to CKD pricing. Over a period of 3-5 years, we plan to be a part of the ‘Make in India’ campaign and will consider manufacturing here. However, it will not have a major impact on margins as we are already operating on the CKD model.

How is the demand in tier II and III markets?

Right now the demand primarily comes from bigger towns, but going ahead you will see us even in the big tier II and tier III markets. As the business grows, foray into the smaller towns would also be imminent.

Do we see the Victory brand coming into India in the future?

We already have the entire Indian Motorcycle range available globally here in India. Our motto is to bring products to India simultaneously as they launch globally. So going ahead, we would follow the same strategy for introducing models in the Indian market.

Right now we are building two brands Polaris and Indian Motorcycle. We want to give everything that Indian deserves before we launch another brand. We want to do justice to any new brand launched. 

How do you see the Indian luxury motorcycle market evolving? Which of the sub-segments (cruisers, adventure bikes, classics, etc.,) will grow faster? Does Polaris have products for all the segments? If yes, which segment will be the growth driver for the industry and for Polaris?

The future outlook of the ultra-luxury two-wheeler segment in India is very positive and shows a lot of potential. The good thing is that this segment is growing and will continue to do so with increasing aspiration and appetite for luxury.

The motorcycle industry, specially the super bike industry - 800cc and above - is really growing at a very nice pace. The CAGR for us for next 4-5 years atleast till 2020 would be in excess of 25-30% plus. It can go to a level of 40-50% CAGR later.

We did research in India before we came in and we found that the customers in this segment are more inclined towards cruisers or touring bikes and that’s where Indian Motorcycle fits in.

The volumes will really pick up going ahead. We foresee a high double-digit growth over the next decade.

One of the major challenge is service and spares. How you are planning to address it? Do you think that the policies are positive?

We have a full-fledged warehouse, we will keep sufficient inventory of spare parts. Also all the dealerships have service and spare parts. The import duties could be reduced.

Any plans to enter into the agriculture and farm equipment sectors?

We have a few ATVs which are classified as tractors. We have already imported that to the country and we are doing some research and have already sold vehicles to few customers. Hopefully if that segment does well and the demand comes up then we will do local assembly and bring down the cost.

It can be a good volume generator for us and it can be a great product for the country and the farmers.

We are working on setting up a manufacturing unit in India and we have a source base in Chennai where we are working with all the auto components.