Riding on new roads

Girdhari Chandak, Vega Auto Accessories

A brace of foreign brands are making their presence felt in the Indian helmet market

It's the newest addition to the shelves at Allibhai Premji Tyrewalla, one of Mumbai's largest and oldest two-wheeler dealers. No, it isn't a glittering new two-wheeler that's waiting for an opportunity to eat up the road miles. It's a helmet made by a mid-sized Italian company AGV.

India is the world's second-largest two-wheeler market so it isn't tough to understand why AGV has come speeding to Indian shores. Right? Not entirely.

In keeping with the spirit of our times AGV has a slightly different plan in mind "" it plans to make premium helmets for the Indian market. Also, it plans to get helmets manufactured here by an Indian partner for other parts of the world.

AGV isn't the only company that has arrived in India with this gameplan in mind. Take a look at American company Daytona helmets which has tied up with Belgaum-based Vega Auto Accessories. And GPone and Nava which have tied up with industry veteran Steelbird, which is based in Gurgaon.

Says Steelbird,managing director, Rajeev Kapur, "The industry has good scope and potential because of the changing market dynamics and the massive demand for two-wheelers."

The fact is that the Indian helmet market isn't anywhere as big as it ought to be. There are two key reasons for this. Firstly, wearing helmets is only compulsory in Delhi and half-a-dozen other states. Most other parts of the country are still dragging their feet about implementing helmet wearing.

That's not the only problem faced by helmet manufacturers. It's reckoned that about Rs 200 crore worth of helmets are sold annually. But almost 85 per cent of them are produced in the unorganised sector "" those are probably the ones you see being sold by the roadside.

Nevertheless, the organised sector players like Vega, Steelbird, MPA and Studds are extending their range, conducting road shows, intiating road-safety lectures, and even forging alliances with foreign partners to make the most of the growing demand.

For, despite the difficulties, the market is expanding swiftly. About four years ago growth in the helmet segment was cruising along at around 10 per cent to 12 per cent annually. Now it is hurtling along at almost 40 per cent. That's why even global players are now looking at India.

Take a look at the moves being made by the different companies. Steelbird has an existing technical collaboration with Italian helmet company Bieffe.

Last year, it struck deals with GPone and Nava for top-end helmets. Priced between Rs 2,500-2,700, the GPone range has already hit shelves. Nava will drive into the market shortly with its premium products pegged at Rs 15,000.

AGV's Pacific range will also be aimed at two-wheeler drivers who can afford to pay slightly higher prices for their headgear. The Italian company has tied up with local company Forma Sports, promoted by Amit Desai and a group of non-resident Indians. Former test cricketer Kiran More is one of the company's minority shareholders. The company also makes protective headgear for cricketers.

For the Indian market Forma will manufacture AGV's Pacific range and it will also make AGV's Veloce brand for export. "It offers a different product in the market and with purchasing power going up, consumers are interested," says Vaishali Desai, in-charge of purchases at group company Pro-Tech which manufactures cricket helmets.

Forma's helmets retail between Rs 400 and Rs 1,500. AGV's offerings will be priced above Rs 2,000.

And Belgaum-based Vega Auto Accessories, which has just launched a new Rs 799 plastic helmet "" Corah, is hoping to double its Rs 8 crore turnover this fiscal. It has a tie-up with US-based Daytona Helmets mainly for exports. Currently 50 per cent of Vega's turnover comes from exports. Says Girdhari Chandak, director, "The domestic market is very good which is why people are looking at design and collaborations."

What's driving this excitement? Obviously, the figures are compelling. According to the Society of Indian Automobiles (SIAM), roughly 4.2 million two-wheelers hit the roads in 2001-02. That moved up to about 5.3 million in 2002-03.

Given this growth pattern and the fact that motorcycle majors like Hero Honda are selling more than 200,000 bikes a month, helmet makers, not surprisingly, believe that the market for their products is bound to grow swiftly.

Says M B Khurana, managing director, Studds, who is also the president of the All India ISI Helmet Manufacturers Association, "Our growth is directly linked to the growth in the motorcycle industry. Unfortunately, most of it is going to the unorganised sector."

Fortunately, for the helmet manufacturers there are promising signs. Even though the laws are lax in most parts of the country, consumer awareness is bringing many two-wheeler drivers into the organised sector.

Says Chandak, "The trend is changing, consumers are considering safety as well." However, Khurana of Studds strikes a discordant note: "Helmets save lives but no one insists on ISI marked helmets."

Nevertheless, consumers are slowly graduating from the unorganised sector, where roadside helmets come for a paltry Rs 200, to sturdy offerings by the 23-odd established companies.

These players, who make helmets according to the standards laid down by the Bureau of Indian Standards sell their wares through an organised dealer network with prices ranging from Rs 400 to Rs 1,200. While the bulk of the market is at the lower end, the premium helmets boast a plethora of features "" removable pads, air vents, visors "" and colours.

Premji, for instance, cites the example of Maharashtra which has more than 4 million two-wheelers on the roads. If the Motor Act is enforced he reckons that about 5 million helmets will be needed in a very short space of time.

But that's a long way off. Meanwhile, the players are riding up the value chain, offering better products, educating consumers and expanding dealer network. Dealers make between 5 per cent and 11 per cent margins depending on the state they are based in. Vega's dealer headcount is up from 120 to 200 in three years. It now produces 1,000 helmets a day from the earlier 200.

Last year, a restructured Studds invested Rs 3.4 crore in testing equipment and updating facilities. So daily capacity is up from 1,800 helmets three years ago to 2,200 helmets. Steelbird is also planning to increase the number of dealers from the current 1,000 this year.

All the players hold regular road shows and safety lectures apart from sporadic newspaper advertisements. Vega even has plans to tap the idiot box to advertise its new products this year.

Can all this make a dent in the unorganised sector. Says Forma's Desai, "We offer safety that is the key. It's for the consumer to realise that."

That's why Vega and the other players are betting big on youngsters. So they have replicas of helmets worn by MotoGP racers, hoping that consumers won't mind paying a little extra for both image and safety.

Says Chandak, "With youth showing greater interest in these sports, the awareness is helping us market such products." Adds Premji, "If a consumer walks away with a Rs 60,000 motorcycle, spending an additional Rs 1,500 on a good quality helmet should not be an issue." Whether that happens, remains to be seen.