Indian Bike Makers To Take On Chinese Counterparts On Africa Roads.

MUMBAI: Indian two-wheeler majors plan to take on their Chinese counterparts in Africa by launching a string of new, price-competitive products in the continent, placing their bets in a market that has the potential to drive export growth this financial year.

Three of India's largest bike makers - Bajaj Auto , Hero Honda and TVS - are setting up assembly plants in Africa, hoping to boost its manufacturing prowess in the fast growing African market where 2.5 million bikes are sold every year.

Chinese bike makers, which dominate the African market, will face stiff competition from Indian players with potential to offer better quality products at competitive prices, according to industry watchers.

"At low penetration, poor infrastructure and rising disposable income levels, Indian two-wheeler majors see a huge opportunity in the African region. Bike makers are launching their entry level models in the African market to get a larger foothold," said Abdul Majeed, auto practice leader, PwC.

India's largest bike maker Hero Motor Corp, which looks to ramp presence in export markets post spilt with partner Honda, plans to launch its entry-level bike CD Dawn in the continent at a very competitive price, according to senior automobile industry officials. The bike maker will launch other 100 cc models once CD Dawn establishes its presence.

"As stated earlier, we have formed a cross-functional team (CFT) to explore export opportunities in markets in Africa, Southeast Asia and South America. This is currently work-in-progress and at a preliminary stage, and therefore, too early to discuss specific details such as nature of our operations and expected volumes from exports etc," said a Hero group spokesperson.

Industry experts familiar with the matter say the entry into Africa or other export markets will not benefit the company in terms of margins and profits.

"Bajaj Auto, the largest exporter to Africa, earns 6% margin after factoring export benefits of 8%. This is after being in the market for three years and increasing prices considerably in the last few years," said a recent report by JM Financial Institutional Securities.

Source : economictimes.indiatimes.com