Dream it, build it!

At a function during the Auto Expo 2006 in January, the Canadian High Commissioner in India made an interesting observation. She travels extensively in India and, she said, her development index for villages depended on the number of motorcycles she saw on the road. Apparently, she got the idea from one of her predecessors who used to count the number of bicycles on village streets during the early 1950s. Well, going by the numbers, the High Commissioner will need a supercomputer to derive her index. That's because the Indian two-wheeler market today stands at 6 million units annually, and is expected to touch a stunning 10 million units by 2010.

The relevant point here is that all these motorcycles are produced and sold by a highly organised industry, with players who have technological tie-ups, strong research and development facilities and established service networks. And every product sold in India is tested to the last nut by competent authorities. Compare this with China""which, incidentally, will continue to lead India as the world's largest market for two-wheelers""and the picture couldn't be more different. There are, evidently, more than 100 motorcycle manufacturers in that country, building clones of established Japanese runabouts with small engine capacities. They are cheap to buy and run but are not as safe or as durable as their Indian counterparts. Surprisingly, it is these motorcycle/motorcycle component manufacturers who are now being eyed by prospective motorcycle manufacturers in India, like Mahindra & Mahindra, to help them open their two-wheeler account. While this may work as an interim measure to reduce the time required to enter a booming two-wheeler market, it may not prove sustainable in an environment where quality prevails and sells over everything else. Forget Chinese suppliers and partners, even companies that have collaborated with well-established South Korean companies (LML and Kinetic, with Daelim and Hyosung, respectively) have met with only relative success in India till now. This, despite the fact that these South Korean firms were relying on technology transferred to them by the Japanese in their early days.

The signal to those who want a share of the Indian two-wheeler market is very clear""link up with a robust partner or rely on strong R&D, do not compromise on technology and quality, and never forget after-sales service. Most Indian two-wheeler buyers may still rely on word-of-mouth but they are an informed lot, and serving this breed needs more than a stop-gap measure borrowed from another market with questionable fundamentals. While it is possible that there will be no shortage of hungry entrepreneurs lured by the new special economic zones and by sops for setting up small-scale industries that build two-wheelers off cheap blueprints from across the border, industry leaders might be better off planning to grow organically. They can surf the enormous Indian talent pool and build strong two-wheeler enterprises that have the potential to challenge the rest of the world.