Mahindra & Mahindra’s (M&M) new foray into two-wheelers could create a new segment of two-wheelers altogether. And if the signs are to be believed, it could well be a ‘low-cost solution’ for ‘personal mobility’.
The high cost of oil and metals including steel has of late put pressure on the profitability of two-wheelers. M&M plans to turn this into an advantage, by giving consumers an option for good-looking, comfortable short-to-medium distance movement at a low cost.
M&M would target a very important segment of first-time vehicle owners in the country, that of first time users, who account for 75 per cent of India’s population. This, coupled with the focus on low cost and highly controlled sourcing, could give M&M the capability to revive the low-end of India’s two-wheeler market. This segment, the 100 and sub-100 cc motorcycles have seen a steady decline in growth over the last couple of years.
The company is planning to “focus on a low-cost model to make their manufacturing as efficient as possible,” said Anand Mahindra, vice-chairman, M&M, on Wednesday while announcing the takeover of Kinetic Motors.
With Kinetic’s existing plant, and Mahindra’s recently acquired Italian technology company Engines Engineering, the company would, in fact, be in a position to bring in two-wheelers at a price point where, according to Mahindra, “every Indian household would have a Mahindra product”.
The new company, Mahindra Kinetic Scooters and Motorcycles, would target the Indian as well as Europe and the US market, said Mahindra.
“There is increasing popularity in the developed world for two-wheelers and scooters, given the price of oil and metals,” Mahindra said. “We believe this to be a great opportunity.”