Stallio upper gear stalls as M&M motorcycle sales slip 36%

Mahindra & Mahindra, which has been aggressively trying to make inroads in the 7.3 million units per year motorcycle market with the help of Bollywood actor Aamir Khan, has failed to create much excitement, with sales slipping 36 per cent last month from the previous one.

Sales of the Stallio, a 110cc bike launched by M&M towards the end of September, were just 1,706 units in November as against 2,664 units in October.

The Stallio has to compete with segment leaders like Hero Honda’s Splendor and Passion brands and Bajaj’s Discover on pricing and power. It is M&M’s only motorcycle presently on sale and is priced at under Rs 42,000 (ex-showroom, Pune).

Honda’s CB Twister, a 110cc bike launched to challenge the Splendor, sells more than 15,000 units per month and is priced at around Rs 45,000 (ex-showroom, Pune).

While executives at Mahindra Two Wheelers, the newly created company of the Rs 32,000-crore Mahindra Group, claim the Stallio is facing encouraging demand, it is in the process of expanding the reach of the bike to all its dealers.

When asked about the sharp drop in sales, Devendra Shinde, vice-president (marketing), two-wheelers, said: “About 250-275 dealerships are selling the bike, while others are only displaying it. We are in the ramp-up mode. Our production of the earlier period got cleared in October and whatever we produced then was sold in November. We have got into the motorcycle segment for the first time and we are still learning.”

Mahindra Two Wheelers has put in place about 400 dealers for its two-wheelers, with an additional 250 service outlets. The company would be expanding its reach to the taluka level from the district level.

The Stallio is promoted by M&M as a stylish and practical bike, with attractive fuel efficiency. The company reportedly paid Rs 14 crore to Bollywood actor and director Aamir Khan as endorsement fee for promoting the bike.

In addition to the Stallio, consumers don’t seem to be rushing to buy M&M’s scooter range, of three-odd models. Collectively, the company sold just 14,148 automatic scooters in November, a fall of nearly 24 per cent compared to the 18,540 units sold in October.

However, the sale numbers are up on a month-on-month comparison from last year. M&M sold 7,020 two-wheelers in November 2009 and 6,804 units in October 2009.

Mahindra Two Wheelers dispatched a total of 16,569 units in September, which grew in October to 21,204 units and it upped sharply to 15,854 units in November. The drop in November was despite a motorcycle being added to the production line.

A company executive, however, maintained that demand for its products were outstripping supply. “We haven’t been able to satisfy demand for our products and we are in the process of ramping up production,” Shinde added.