Speak of low-cost products and the Kolkata-based Rs 620 crore Xenitis group is the first enterprise that comes to mind. Consider its achievements. | |
| It was the first company to launch sub-10,000 PCs five years ago forcing major PC makers to offer ultra-low cost entry-level models. Then it launched India's first laptop to be priced under Rs 20,000. |
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| And now, it has launched a 100cc motorcycle for under Rs 20,000. Xenitis has launched the mobike for Rs 19,990, with equated monthly instalments (EMIs) fixed at Rs 490. |
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The 100cc bikes of its nearest competitors "� such as TVS, Bajaj and Hero Honda "� are priced over Rs 30,000. In fact, there's no 100cc bike at this price point in India, and probably in the world.
| SMOOTH RIDE | | Company | Model | Price
(in Rs) | | 1 Bajaj | Platina | 30,000 | | CT 100 | 32,000 | | 2 Hero Honda | Splendour
NXG | 42,000 | | Passion Plus | 41,000 | | CD Deluxe | 37,000 | | CD Dawn | 34,000 | | 3 TVS Motor | Star Sport | 35,000 | | Star City | 36,000 | | 4 Yamaha | Alba | 42,000 | | Crux S | 37,000 |
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| "It is not impossible. All one has to do is source and design components accordingly and also keep reasonable profit margins," asserted Santanu Ghosh, chairman of the company. |
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| He said the intention was to rewrite the price equation in the motorbike industry in India. Most of the motorbikes sold in India were in the 100cc-125cc category, with the 125cc priced at over Rs 45,000. Xenitis motorbikes are being built at its Hooghly plant. |
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"All it takes is backward integration and focus on volume manufacturing. Accordingly we designed and sourced components for the bike," said Ghosh.
| XENITIS' PLANS | | PLANS | YEAR | | * Sub-Rs 10,000 PCs | 2002 | | * Sub-Rs 500 mobile handsets | 2007-08 | | * Sub-Rs 20,000 laptops | 2007 | | * Sub-Rs 20,000 mobikes | 2007 | | * Sub-Rs 1 lakh passenger cars | 2009 | | * Plans ultra low-cost buses and trucks too | 2009 | | * Plans IPO to fund second phase of expansion | 2009 |
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| The Xenitis bike, sold under the Global brandname, and with a self-starter, halogen headlamp and integrated instrument panel, was priced at par with the global selling price of such motorcycles, said Ghosh, implying that Indian companies were currently selling motorbikes at artificially-inflated prices. |
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| "When the plant starts making up to 1 million bikes annually, I expect the competition to lower prices to comparable levels," said Ghosh, who refused to divulge more details on how this pricing was possible. |
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| All he said was that volume manufacturing of some components and sourcing from other volume manufacturers, mainly from China, helped achieve this aim. |
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| At present, most components for its 100cc bike are being sourced from India and manufactured at the Xenitis plant in Hooghly. |
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| Xenitis also plans to roll out 150cc gearless scooters, as well as 150cc and 200cc motorcycles and 250cc cruiser bikes soon "� all based on such aggressive pricing. |
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| "All our products will be priced way lower than competition. Although profit margins will be reasonable, the fact that we are offering extremely affordable products without compromising on the quality, will push sales," Ghosh said. |
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| Xenitis set up its two-wheeler manufacturing plant in West Bengal in April this year at an investment of Rs 300 crore and an installed capacity of 90,000 units per month. |
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| At present, it is manufacturing close to 30,000 two-wheelers every month "� mainly a model called Xpression since April 2007 and a second brand Xpression Plus, since then. |
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| "A range of bicycles, from another group subsidiary, is also on the anvil," said Ghosh. Since April this year, Xenitis sold over 10,000 bikes in eastern India. Ghosh said it had booked orders for 160,000 bikes this fiscal already. |
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| The company is adding to its existing dealer and distributor network of 81 dealers and 350 sub-dealers to have a total of 350 dealers. |
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| "North India makes up about 70 per cent of national two-wheeler market and we appointed 60 distributors and 250 retailers in North India today," Ghosh said. |
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| Xenitis Group has set a turnover target of Rs 5,000 crore by 2010, from Rs 620 crore now. Group sales in April-September 2007 was in excess of Rs 500 crore. The PC and automobile divisions were expected to contribute Rs 2,500 crore by 2010. |
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