IGI Logo

Digital trends of searches for HD/Triumph launch similar to Hunter launch The first week of Jul-23 witnessed the launches of 400cc motorcycles in India from two global marquee brands viz., Harley Davidson (HD) and Triumph at a very aggressive pricing and attractive features – making these aspirational brands highly accessible to the Indian customers. While the actual end-consumer feedback will take time to materialize, we analyzed the trends arising from online searches in the first fortnight to derive insights on evolving digital trends. The Google Trends data suggest that both these launches are garnering similar responses to Royal Enfield (RE) Hunter launch and are way stronger than search trends visible during launches of Honda CB350 (H’ness) and Jawa. The search intensity is at similar levels as the cult brand of RE Classic 350 and is widespread across markets. We list below our key observations:

* Strong initial response with search intensity similar to RE Classic 350…: The search data for HD X440 and Triumph 400 indicate a very strong start for these aspirational brands, which have now become more accessible to consumers. While the initial spurt for any such launch is expected, even after a fortnight of launch the intensity of the search is at similar levels as RE Classic 350 (Exhibit 1). Between HD X440 and Triumph 400, HD started on stronger note initially but Triumph caughtup and now the search intensity is similar for these brands (Exhibit 2).

* and healthy interest across markets: The share of search between these three motorcycles (RE Classic 350, HD X440 and Triumph 400) has been overwhelmingly in favor of new launches across markets (Exhibits 3 and 4). In key RE markets (>90% of its volumes), HD has ~44% of search share in the first fortnight of launch followed by Triumph with 36% share. On relative basis, urban-centric states have witnessed more searches for new brands (43% share for HD and 41% for Triumph) as against rural-centric states (44% share for HD and 30% for Triumph).

* Search intensity/trends comparable to RE Hunter launch and much better than Honda CB350/Jawa launches: As against the past launches in the same segment, HD and Triumph’s search trends appear to be very much comparable with that of Hunter 350 (blockbuster product) and substantially stronger than that of Honda CB350 (H’ness) and Jawa motorcycles (Exhibits 5-10).

* Hunters’ share of search and volumes (v/s Classic) is very similar in 1HCY23: Hunters’ search intensity in the first fortnight of launch was very strong (in line with HD/Triumph) vs. RE Classic 350, enjoying 68% share of searches vis-à-vis 32% for RE Classic 350. However, after the first fortnight, search trends moderated for Hunter with the share of searches at 37% in CY23YTD (between Hunter and Classic). Interestingly the share of volumes was at similar levels of 37% (Exhibits 11- 12).

* Valuation and view: Hunter helped RE expand its size of the pie, as volumes of RE 350cc portfolio (ex of Hunter) have been stable at 46k-47k/month (Exhibit 13). While the new launches of HD and Triumph will also expand the pie of the super-premium motorcycles (>250cc), it may pose a threat to RE 350cc portfolio and curtail its growth. These new launches need to generate sustainable volumes of 8k-12k/month to drive 5% EPS upgrade for BJAUT/HMCL. In 2Ws, we like HMCL and have a Neutral rating for the other 2W OEMs (BJAUT, EIM and TVSL). We also like ENDU as a good proxy to the 2W industry.

To Read Complete Report & Disclaimer Click Here

For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html SEBI Registration number is INH000000412

Above views are of the author and not of the website kindly read disclaimer