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Dr. Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Chief Consulting Editor's Desk
Rajita Chaudhuri
Dr. Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Editor-in-Chief
Dr. Arindam Chaudhuri
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Slow & Steady... Wins LML’s Race
LML has done Well to Recover from a Self-Made Downturn. But an Extravaganza Product Offering by The End of 2011 may be too soon for its Future
Issue Date - 16/06/2011
Soon after Hero Honda’s four-stroke motorcycles started luring consumers away from Bajaj in the 1980s, it was LML which thwarted Bajaj Auto, the then largest scooter manufacturer in India, in the domestic scooters market. The rugged and macho-offerings from LML, namely NV, Vespa and Select were able to establish a strong connect with a TG that belonged to the age group of 35 and above, giving Bajaj a tough time in its core area of operation. However, once Piaggio (LML’s partner) parted its way, and the company faced some severe labour unrest during the late 90s, it took only a couple of years before LML found itself in the custody of the Board for Industrial and Financial Reconstruction (BIFR). But the mounting losses and the rising problems could never deter the entrepreneurial instincts of the company’s promoter Deepak Kumar Singhania. Although the change in market dynamics and shifting of consumer preference from scooters to more fuel-efficient motorcycles and gearless scooters held Singhania’s ambitious targets for a couple of years, LML eventually bounced back by focussing on export markets to keep the ship moving.

It was in April 2009 that the company finally made a comeback in the domestic market by relaunching the NV brand in Delhi. Since then it has used all its past marketing experience to re-establish its presence. Though one step at a time, over the past two years, LML has emerged as a strong competitor – if not to bigwigs like Hero Honda and Bajaj, then at least to several other established players like Mahindra, Suzuki et al – in markets like Western UP, Punjab and a few more pockets in the Northern region where it has a presence. And it has actually sold decent numbers. For instance, the company sells more than a 1,000 vehicles per month in Delhi alone out of the 3,500 units (monthly average) that it sells in the domestic market. But then, the key strategy for the company’s revival is still playing a critical hand for the company as out of the 7,500-8,000 units it sells per month, 4,000 units are exported to markets like Europe and US.

However, it seems as if the company has now decided to shift out of the turtle strategy and take a big leap. At least the plan of action shows so for LML is not only relaunching another one from its old portfolio – Select – in the first week of June, but is also gearing up to come out with a number of motorcycles and, more importantly, gearless scooters in the months to follow. The relaunch of LML Select certainly is a card to boost numbers. Considering the fact that NV has already re-established the name, Select, which also belongs to the same segment, will only help the company build its volumes further by providing an additional option in terms of features and looks to the consumers. But the most critical step for the company will be its entry into the gearless segment, which has been literally built and mastered by Honda Motorcycle and Scooter India (HMSI) in India. And that means, if LML has to go back to its old glorious days, it has to play the way it did in the 80s to give Bajaj nightmares. But till now the question remains, can LML do it?

The team responsible for establishing the brand certainly seems confident on this aspect as Subrata Chakraborty, MD, Brand Curry (LML’s creative agency) answers, “LML saw the market in the gap rather than looking at the absence of gearless scooters as a gap in the market. The time to come will be even more exciting as the company will expand its portfolio.” But then, with products like Activa and Eterno, HMSI, which shaped the scooter segment amid increasing interest for motorcycles (which even forced Bajaj to shut down scooter production in December 2009), is certainly the meanest player when it comes to market competition. And that’s not all. The competition is destined to see even more interesting times as Mahindra and Suzuki too will start pushing their existing products at some point of time.

However, talking about the overall scooter segment, LML certainly sells more than many competitors and claims to be the second largest scooter manufacturer in Delhi after HMSI. Interestingly, when LML decided to make a comeback, products offered by almost all the competitors were more or less the same in terms of looks. And that became a real advantage for NV for its sheer ruggedness and completely different look as compared to the other trendy scooters available in the market. Avers P. S. Choudhary, Head – Marketing, LML, “Indian consumers always had a strong connect with the brand. But when we came back to the domestic market, the same supported by the tough and macho appeal of the NV helped us in getting the consumers back in the showrooms. Our core focus is to provide a strong consumer satisfaction to ensure good world-of-mouth publicity.” Supports Ratnodeep Rudra, Partner and Director, Brand Curry, as he says, “There is a segment of consumers who have grown with the brand and are today coming to the showrooms without any hesitation in their minds.”

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