New Models from Honda and TVS along with Bullet 350 and Splendor+ Lead Customer Satisfaction Ratings

Among Motorcycle Owners the Aspiration for Cars Highest in North India

TNS 2006 Motorcycle Total Customer Satisfaction Study

According to the findings of the 2006 Motorcycle Total Customer Satisfaction Study released on 28th August 2006 by market information provider - TNS, the newly launched Hero Honda CD Deluxe, Honda Shine, and TVS Apache rank highest in their respective segments, while Hero Honda Splendor+ continues to lead the 'executive' bikes. Bullet 350 continues its supremacy in the niche 'cruiser' bike segment with Bajaj Avenger recording the second best ratings in the segment.

The study represents the responses of more than eight thousand seven hundred new-motorcycle buyers towards the performance of more than 50 models in the key areas of sales satisfaction, product quality, motorcycle performance and design, after-sales service, brand image, and cost-of-ownership. The TCS index score provides a measure of satisfaction and loyalty that a given model or brand enjoys among its customers.

"The overall industry average TCS score has risen in this year after being stagnant in 2005." said Pradeep Saxena, Senior Vice President of TNS Automotive. "The strong performance of the new launches in each segment of the industry coupled with a stronger performance from Hero Honda Splendor+ has driven this overall rise in customer satisfaction this year," he added.

Chris Bonsi, Regional Director TNS Automotive said, "A trend that has been continuing for the past couple of years is the strong performance of new models. They tend to get high ratings on all relevant parameters." Even this year Honda Shine and TVS Apache have received the highest ratings on all satisfaction parameters in their respective segments. However their strong performance is driven by Quality and Design as all the top ranking models have high scores on 'Product Performance & Design' and 'Product Quality'.

Among the new models Honda Shine has received the industry best ratings in arguably the most active segment in the market today - the Upper Executive 125cc segment,

Whereas novelty in product design has a positive rub-oft on customer expectations, Bullet 350 and Hero Honda Splendor+ defy this general trend with a strong performance on all measures of customer satisfaction. "Hero Honda should be rightfully proud of Splendor+ as this product has stood the test of time for so many years despite being in a mass market and facing competitive attacks constantly", observes Chris Bonsi. Hero Honda Splendor+ is well supported by Passion plus at number two position in the executive segment.

The 125cc segment is a big contributor to the overall development of the Indian two-wheeler market as is evident from the acceptance of this segment by the Indian consumer. The right mix of performance, product design and cost of ownership is making this the preferred option among a large segment of Indian motorcycle owners who plan to buy a motorcycle in future.

The emergence and growth of this new segment will define the shape and direction of the industry in the years to come. According to Pradeep Saxena, "All major manufacturers and new entrants in the market already have strong models in this segment and there seems to be a clear movement towards this engine size. A lot will of course depend on how the newly launched models perform and whether manufacturers are able to sustain this high level of customer satisfaction. As of now the top four models in this segment have a higher score than their counterparts in the 100cc executive segment. In this segment the foreign companies seem to have established a clear leadership with Yamaha Gladiator and Suzuki Heat at number two and three positions respectively, after Honda Shine.

The 2006 MTCS study also examines key trends in the industry. Some of the significant observations are:

▪	Although the largest segment of the market continues to be the 'first new motorcycle buyer', the proportion of additional/replacement customers has grown to 36% in 2006 from 26% in 2003. This is coupled with a reduction in replacement cycle, from nearly 5 years to just about 4.5 years. Also to be noted is that this segment of additional/replacement buyers have higher expectations based on their prior experience and hence manufacturers will have to meet and manage rising expectations.
▪	For future purchases the preference for motorcycles with higher engine capacity is seen more in the west and south than in other part of the country. Across the country, close to 13% of current motorcycle owners intend to upgrade to a four-wheeler as their next vehicle. The propensity to upgrade to a car is higher in the north.
▪	Among customer intending to shift to a four-wheeler, the budget as stated by them indicates that they may not stop at just a Maruti 800 but may go up to a premium compact car such as Santro, Indica or WagonR.

 
"The growth in the entry and premium compact segment of the four-wheeler market composition will be clearly impacted by the large base of current motorcycle owners, as in contrast to the popular perception, the intention to buy a used car at the time of upgrading from a two-wheeler is less than 10%", observes Saxena.

The TCS study was conducted from May through July 2006 across 26 centres: Ahmedabad, Ahmednagar, Ajmer, Bangalore, Bhopal, Chandigarh, Chennai, Cochin, Coimbatore, Dehradun, Delhi (NCR), Gorakhpur, Hubli, Hyderabad, Indore, Jaipur, Kolkata, Lucknow, Ludhiana, Mumbai, Patna, Pune, Rajamundry, Ranchi, Surat, and Trivandrum.