There is a new motorcycle manufacturer in town. The Indian arm of UM Motorcycles has entered into a joint venture agreement with Lohia Auto to manufacture and market its motorcycles in the Indian market.
Both the companies will invest Rs 120 crore for their 50-50 venture. The joint venture is planning to launch three cruiser bikes for the Indian market in the 250-350cc segment next year. While the details of the bikes have not been revealed but the prices of these bikes will start from Rs 1 lakh, and will compete directly with the Royal Enfield.
The manufacturing facility will come up at Kashipur in Uttarakhand with an initial installed capacity to produce 100,000 units. It will utilise Lohia Auto's existing plant to make electric scooters and bikes and production is expected to start in the second quarter of 2015.
"We would be working in the affordable price segments that should start at Rs 1 lakh, going by the current taxation structure. As we move ahead we plan to enrich the offering by launching sports bikes and the current hotspot scooters for the Indian customers," said Rajeev Mishra, UM Motorcycles India.
This introduction of another manufacturer in the premium motorcycle space is a very interesting development. Royal Enfield,which, sells bikes in the 350cc-500cc segment and till now yhey have hardly had any competition, bit with this JV they might just begin to feel the heat. If the quality of the products from UM Motorcycles is good, then there is no reason that this joint venture won’t work. But the main obstacle for the company is their brand name that will take years establish.
