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Indian bike brands tap used market

News, 21 June 2016

NEW DELHI: As India's market for new two-wheeled vehicles grows, so too does the second-market and manufacturers are taking steps to ensure brand loyalty extends to pre-owned motorbikes and scooters.

"The used two-wheeler industry is very unorganised but gives us a great opportunity for a viable business," according to Y S Guleria, SVP/sales and marketing at Honda Motorcycle and Scooters India (HMSI).

"We are able to garner the loyalty of the brand and keep the customer in the same family," he told the Business Standard, as he claimed that Honda's customer base across the country exceeded 25m.

Almost 16.5m new two-wheelers were sold in 2015-16, according to data from the Society of Indian Automobile manufacturers, a year-on-year rise of 3% and less than half the growth reported in the previous year.

But latest figures show sales grew 15.3% in April-May, indicating a pick-up in rural demand.

This rise has been driven in part by new model launches which have also resulted in growing used-bike sales: the used two-wheeler market is estimated to be 12m units with a value of between $8bn and $12bn.

Honda said its used two-wheeler sales jumped between 20% and 25% last year. "We have created a separate vertical for this business," Guleria explained. "As of now we have 90 'Best Deal' outlets which we plan to take to 100 by end of next month."

Rival Hero has been offering a similar option for several years, whereby existing dealers sell refurbished bikes with a warranty and free servicing.

Tata Motors has also tapped into this market, albeit in a different manner. It has teamed up with CredR, an online marketplace for buying and selling used two-wheelers, to offer an opportunity to upgrade to four wheels.

A series of CredR-Tata Nano Exchange Melas will enable owners of two-wheelers to trade in their ride as part of a package for a new Tata Nano.

Data sourced from Business Standard, Econmic Times, SIAM; additional content by Warc staff