OooHhh...One More CBU...

The recent news from Rediff Business states that, Mitsubishi is planning to launch the Lancer Evolution, the much awaited model in 2010. It is supposed to be 2.0 litre, turbocharged engine producing 300 bhp. But, this is again going to be a CBU. The car is expected to cost around 40 Lakhs. The company has indicated a target of 75 cars in its first year.

So, rather than competing against the likes of Accord, Teana and Superb, the EVO will struggle between Audi, Merc and BMW. The sole player for now in the price range of 40 lakhs is Volvo with S80.

The Lancer Evo might join the fleet of CBUs after the recent and potential Fiat 500 and Volkswagen Beetle. Every second girl who sees the Beetle is actually impressed till she knows the price. Though these cars are much preferred and suitable for our urban markets, may be the demand is meagre to actually set up a plant here.

But this situation could actually be a paradox.

Unless the demand is high, there will be no local production. Unless there is no local production, CBUs will attract 110% tax thus increasing the price and reducing the demand. So, how should companies strike a balance?

May be a proper market research along with a close to perfect demand forecast should help.

Are we ready for an all new experience ?

After the boom in the Indian small car segment, Indian two-wheeler industry is going to experience an all new change. But this time its on the other side. The premium segment. When Pulsar was introduced in 2001, it created a huge demand in the premium segment. This segment then attracted more players.

After almost a decade, this segment is under going a quiet revolution. Its the introduction of high performance powerful bikes. Kawasaki introduced the Ninja 250, Bajaj with KTM is introducing a new 250cc bike, Pulsar and Apache are coming up in 250cc outfit, Honda's 250cc is on the cards and Hero Honda is in the process of designing one.

But are the Indian consumers ready for this fun? Does the infrastructure support this? 

Though the companies are not banking on this segment for volumes, is the segment big enough to self-sustain? Still Pulsar 220 and Hero Honda Karizma are struggling for their targeted volumes. 

With big companies now entering this market, the positioning and pricing of the product will play a key role in their success.

Luxury for Masses