Fuel Price Hike Effects: High-end Bike Manufacturers Entering Commuter Segment

The recent price hike is killing many. Many have been hit hard by the blow. The current rage in the two-wheeler segment being the premium, high-performance bikes, the demand now seems to be shifting towards commuter segment bikes suddenly. High fuel-efficient bikes are getting attention by many! So some of the two-wheeler manufacturers are fully geared up to face the challenge to all of a sudden shift the focus. Though Honda and Suzuki are the supposed premium sector manufactures, both the companies have now started thinking of commuter sector motorcycles. If they do get into this segment of bikes, there is doomed to be quite tough competition. Honda and Suzuki will face competition majorly by Hero MotoCorp and Bajaj. These 75-125 cc motorcycles capture at least a 70% of motorcycle world.

The shift towards this segment is not new, it’s been apprehended for quite some time now. The fuel has been getting more expensive by the day and so has the income of rural people, both resulting, ultimately, in commuter sector bikes. It is being expected that Bajaj and TVS will as well be impacted quite much. The cost effective mass will now demand more of two-wheelers, while the high premium segment demand will see the downfall. This will be highly positive for Hero while a bit negative effects will be faced by Bajaj, TVS, Honda, etc.

These things will also be effecting the shares of the companies. Saroj Singh, Executive Research (Automobiles), Microsec Capital Ltd., sends a piece of advise while asking investors to buy Hero MotoCorp and Bajaj Auto, the reason being the huge number of same-segment product launches coming in the year ahead. Way to face the price hike is to grab the opportunity, buy the lower end bikes or even their shares; since the prices are expected to rise, making the lower end segment motorcycle market take a rise.