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Smaller Hyosungs in 2015: DSK Motowheels chairman
TG: We have seen DSK more associated with real estate, so what tempted you to jump into a highly-competitive bike market?
Shirish Kulkarni: We’ve been in the auto business for almost fourteen years now. We’ve been dealers for Toyota. And I’m a biker myself: I’ve got three bikes of my own. Whenever I get time, I definitely make it a point to go riding. Hyosung in India was first managed by Garware. They had trouble selling the products and some other issues because they were never really into automobiles. We started talking and they said why don’t I take the dealership. I said I’m not interested in the dealership because I've got my hands full with the Toyota dealerships and I don’t want to take the pressure of selling motorcycles. Then they asked me to look at national sales and I said national sales is an attractive proposition, but what if I tell you I need a black Aquila Pro in Delhi tomorrow and you say you’ll only be able to provide me a red one? That fight is going to go on and then who is to blame? At the end of the day, the customer’s going to lose, and you are going to point a finger at me and tell me I couldn’t sell what we have.
If I am producing the bike and I am selling the bike, I can then play around with it whichever way I want, and so, looking at the market I can plan for the future. I can’t plan for you guys, and what if you don’t accept it? Either you hand over the entire company to me or let’s not do this. So they thought it through, and said that the right thing to do is to give it up, because they were confident that I would be able to do it. So that is how the opportunity came by.
TG: What were the challenges that you faced when you took up the ownership of the brand from Garware? And what were the key things that you needed to focus on?
SK: Well, the first and foremost challenges were the staff, because every member from their team moved in and they had no clue what was going on. It was the biggest challenge for me to convince them that they were in safe hands. The next problem were the dealers, as they didn’t know what to do. Initially with Garware, there were 18 dealers, but only 14 of them moved to me. Four of them decided to shut shop. Today, we’ve got 31 dealers. In the last 18 months, we’ve added 17 dealers, which was a big achievement for me. We have dealerships all the way till Guwahati, Itanagar.
TG: As far as competition goes, you are facing big brands like Harley-Davidson and Triumph. So, are Tier-II cities or Tier-III cities places where people find your products more attractive alternatives?
SK: Yes, I think Tier-II and Tier-III cities are going to be most important when moving ahead because metros are now filling up. Mumbai is crippled, and even in Pune, the way the city is growing, if there are not enough measures taken by concerned authorities, it will be crippled too. So Tier-I and Tier-II cities are where the product is going to move, the attraction is going to be there. That is why our focus now is on smaller markets, places like Aurangabad, Amravati, Nanded, and other small towns in Maharashtra. We also want to go to Mysore, Vishakapatnam, and Srinagar. We want to go to small towns in Rajasthan. We want to move to these cities, put our brand up there and of course pick up the first-mover advantage.
TG: As of now these bikes are assembled, can you tell us what amount of localisation goes into the bikes?
SK: Right now we are only putting locally-sourced horn systems on the bikes; everything else is imported from Korea.
TG: Do you think that thing will change eventually?
SK: It will change. In fact, we have got some 20-odd components that we have sent to Korea for testing, and we will be seeing if they are compatible with the products. If they are, we will be sourcing those particular parts from Pune itself.
TG: How much of the DSK-Hyosung team does the Korean manufacturer own?
SK: This is not a JV. This company is entirely owned by me. We have a technical, and exclusive distributor’s license with us. So we import the bikes from Hyosung and sell it over here. We also have a choice of selling it by our brand name entirely, but the customers know Hyosung, not DSK. So it is important for us to keep that brand name in the picture. This is not a JV, and even in the future, I don’t think a JV will happen.
TG: So that would mean that you would be looking at an R&D team for the future?
SK: Yes, I am going to set that up. By 2015, our R&D team should be ready. I’m planning a new plant, and by around that time everything is going to fall into place.
TG: Whenever we go to other bike manufacturers (Honda, for example), we ask when are the big bikes coming. I want to ask you the exact same question the other way round - when are the small bikes coming?
SK: The end of 2015 is what we are looking at.