DSK Motowheels on the fast lane with Benelli

How does one strike the balance between two diverse brands as allies? Ask Shirish Kulkarni, Chairman of DSK Motowheels which is the sole distributor of Hyosung and Benelli motorcycles in India. The former was the first to sign up as partner in 2012 with the latter following a couple of years later.

During this time, DSK has put in place 47 exclusive showrooms for these two brands with Hyosung accounting for 31 of these. Yet, it is Benelli which is the more aggressive of the two and keen on building its India presence quickly. By the end of this year, its dealerships will nearly double to 30 putting them almost at par with Hyosung’s tally.

Last year saw DSK sell 4,000 bikes with Benelli comfortably ahead at 2,500 and Hyosung making up the balance. The target for 2016 is to increase the Benelli component to 3,500 units while Hyosung will stay flat.

The present Benelli range comprises TNT 25, TNT 300 TNT 600i, TNT 899 and TNT R with prices ranging from ₹1.8 lakh to ₹12 lakh. This year will see the TRK 502 and Leoncino supplement the product kitty while Hyosung will just see one product in the GD250R 2016 joining the GT250R, 650R and AquilaPro.

Kulkarni admits that there is a lot more going with Benelli where the partnership is poised for greater things. Whether this will lead to an equity-based joint venture remains to be seen though the fact that DSK has moved to a bigger facility in Talegaon near Pune is indicative of a bigger role beyond assembling and distributing Benelli bikes.

“Benelli is looking at more bikes over the next two to three years. Taking the partnership forward is a very high possibility but this will take time. What we want to achieve is higher market share and keep bikes more affordable,” says Kulkarni.

This, in turn, can only happen with localisation which means Indian suppliers will have a more active role as mass production becomes a reality. The Talegaon facility has enough capacity in place and can eventually produce 100,000 two-wheelers annually. For the moment, estimates are more modest at 6,000 units over the next 2-3 years.

The next phase will see this grow three-fold to 20,000 units annually by which time, hopefully, Benelli will have increased its scope of business in India. And if this means that Talegaon will end up being an export hub, the sky is the limit for the DSK-Benelli combine.

On the face of it, there is really no reason why this should not happen. The market for premium bikes is on a roll with a growing base of young buyers keen on making a statement with their brands as is evident with Royal Enfield and Harley Davidson. Likewise, as Kulkarni says, the reception to Benelli has been extremely positive which is reason enough to take the story to the next level.

Of course, all this will depend on what finally emerges from the talks between the two partners. However, even in terms of getting the optimal mix of cost and quality, it just makes so much more sense to manufacture in India which is already the world’s largest two-wheeler market.

In contrast, there is not really much happening on the Hyosung front. As Kulkarni says, this is perhaps to do with the fact that the Korean brand plans to move a large chunk of its operations to China. “I was positioning India as a manufacturing alternative but they were talking to China already,” he adds.

From Hyosung’s point of view, the business plan is to develop products in China that can be shipped across the world while its Korean operations will cater to the needs of the domestic market. Clearly, it is a decision triggered by the need to keep costs in check even though there could be quality concerns.

At present, there are 17 parts sourced locally for Hyosung bikes but only make up four per cent of overall content. The ideal scenario is to have prices fall with a corresponding increase in quality once China takes over production.

“We are going to give it our best shot,” reiterates Kulkarni, a clear message that there is no imminent possibility of shutting down the Hyosung business in India.

While this could perhaps be the tricky part of the DSK alliance, Benelli has been the proverbial adrenaline booster.

Over the next couple of months, talks are expected to kick off on the possibility of bringing its bicycles to India.

After all, the obsession with staying healthy is on the rise and cycling is now rapidly emerging as a viable alternative. Kulkarni is keen on getting in niche Benelli products like hybrid bicycles which will woo the discerning buyer.

There is also no reason why scooters cannot be part of the menu either since the Italian two-wheeler maker also has them in its portfolio.

This product segment is rapidly growing in India thanks largely to Honda whose Activa is leading the surge.

If things go according to plan, Benelli will have a much larger role to play in India with DSK as partner.

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