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Case Title:

Suzuki in India: The Growing Gearless Segment of Indian Two-Wheeler Market

Publication Year : 2008

Authors: Sanjay Sankariya, Joel Sarosh Thadamalla

Industry: Not Applicable

Region:India

Case Code: INA0102A

Teaching Note: Available

Structured Assignment: Available

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Abstract:
The world’s second largest manufacturer of two-wheelers – the Indian two-wheeler industry is broadly classified into three product segments – scooters, motorcycles and mopeds. During 1980, the de-licensing policy of Indian government allowed foreign companies to operate in Indian two-wheeler market through joint ventures (JV). Especially, the entry of Japanese companies changed the dynamics of Indian two-wheeler market by concentrating on customer aspirations, and embracing new technology. Banking on the opportunity, during 1982, Suzuki Motorcycle India Pvt. Ltd (Suzuki), a subsidiary of Suzuki Motor Corporation (SMC), entered the Indian two-wheeler market through a joint venture partnership with TVS Group, an Indian company, to manufacture motorcycles. Until 2000s, the motorcycles were more popular in Indian two-wheeler market. But the launch of gearless scooter ‘Honda Activa’ – a four-stroke scooter by Honda Motorcycle and Scooter India Pvt Ltd (HMSI) in 2001, changed the demand dynamics of Indian scooter segment. Since 2007, the gearless scooter segment has been growing as compared to motorcycles (14.4% to 2.17 million units). The demand for such scooters increased in Indian two-wheeler market due to improvement in product features, design and style; and was targeted to attract young college girls, housewives, and teenagers. Looking for growth, Suzuki launched gearless scooter ‘Access 125’ (Access) in the 100cc to 150cc segment to compete with its competitors like Honda, Kinetic, and Bajaj. But still, a segment of customers preferred motorcycles because of bigger wheels, better road grip, power, higher ground clearance, and low maintenance cost compared to scooters. The case facilitates discussion on whether Suzuki would be able to succeed in capturing these buyers mind space.

Pedagogical Objectives:

  • To examine the growth drivers and demand factors of Indian two-wheeler market
  • To understand the importance of continuous innovation in two-wheeler market
  • To study the impact of consumer behaviour in Indian two-wheeler industry
  • To discuss whether the strategies adopted by Suzuki would help it succeed in shifting the consumer priorities from motorcycles to gearless scooters in India .

Keywords :  Indian Two-Wheeler Market; Industry Analysis Case Study; Transportation; Consumer Behaviour; Motorcycles; Gearless Scooters; Marketing Strategy; Joint Venture; Competition; Foreign Players; Product Innovation; Suzuki; Honda Motorcycle & Scooter India (P) Ltd.; Hero Honda; Bajaj Auto; Kinetic; LML

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