The Indian market is nothing like people in the US are accostomed to. the two wheeler there is as much a common mode of transport there as cars are over here in the US and sales are driven by the lifestyle needs and constraints of the Indian consumer.
bikes have to be cheap. With cars starting new at a bit over $4,000, and perfectly good lightly used cars coming in at $2500 or less, motorcycles are constrained to remain small. Somebody who can buy an expensive motorcycle will buy a car instead.
This means that motorcycles there are mostly single cylinder machines of 100 to 150cc that get 150mpg or better and cost about $1500. You see thousands of these things everyday and are the backbone of personal transport.
The Japanese got things started but have lately fallen behind. THe problem for them is that Indian manufacturers like Bajaj have learned to engineer and produce motorcycles domestically and do it very well. the R&D costs for the japanese manufacturers in Japan are far too high when they have to produce a machine equal to a Bajaj. Moreover, they do not have the option of producing pricier machines that are superior to the domestic machines because the market is extremely price sensitive.
There are other manufacturers besides Bajaj that are doing work domestically such as LML and TVS, but Bajaj is the company to watch because their Pulsar model really is a very good machine that demonstrates that Bajaj can do the job. Baja is an engineering focused company and I expect them to grow their abilities and competencies.
but I do not expect them try to stake it out in the US. For one thing, there is far too much potential in India, China, the Philipines, South america, other south and southeast asian countries. For another, Bajaj has built its business model supplying to a commuter market, not a hobby market. Its skill and competence is not in making sexy race bikes that westerners would buy to look good on. bajaj street cred: 0. If people here scoff at already established Hyosung, what chance does bajaj have?
But Bajaj is not a small company, however. It earned $174M in after tax profit last year.
what about the foreign companies? Honda and Yamaha used to own the market a decade ago. Yamaha had the really zingy RX100 that really was a lot of fun to drive and often wish I could have one here in the US for round town work. Honda produced in cooperation with Indian partner Hero Honda the CD100 model which brought phenomenal fuel economy, unbreakable reliability, and neglibile running costs. THis Honda model is still going strong in India, 20 years later. Honda sells about 1.7 million units of these a year. Just think about that. Yamaha however faltered when emissions regulations and fuel price shifts ended the interest in two strokes and Yamaha did not respond with 4 strokes that would capture interest in the market.
Part of this is related to the fact that Yamaha was working through an Indian partner, Escorts, which had started with the Yamaha RD350. The RX100 was just another off the shelf model. But when the market changed, Escorts was unable to get Yamaha interested in developing models for the now more discerning Indian consumer and Yamaha sales and the brand in the country collapsed.
Honda has recently struck out on its own, apart from hero Honda, with a line of scooters and a motorcyle called the Unicorn. This will leave the venerable CD100 going on its own, while the Honda brand is free to develop and produce motorcycles to fit other niches. I expect Yamaha wants to do the same thing. I suspect that they now see the value of the Indian market and are now interested in developing models and production facilities. But they have a climb ahead of them. The yamaha name is mud in India right now. THey'll have to create motorcycles that meet the price and economy demands of the Indian consumer while also offering performance, quality, and appeal. Its not going to be easy. Honda and Bajaj are going to make it very tough for Yamaha. THey never should have let their brand and market presence collapse in India.
While Indians are not affluent, and Indian motorcycles are far from sexy, the profits to be had there from the sheer number of motorcycle sold are enormous.