MOTOR BIKE MODIFICATION INDUSTRY

Slide 1: Che nnai’s popular and happe ning Cluster

Slide 5: • To s tudy the Charac teris tic s and fe ature s of Bike Mo dific atio n Clus te r. • To s he d lig ht o n this c lus te r whic h is a s ile nt yet po we rful & g ro wing.

Slide 6: • What made the Me c hanics to s tart Bike Modific ation bus ine s s • Ho w doe s Bike modific ation bring value to an e ntre prene ur’s Bus ine s s ? • What is the e ffec t of high cc bike s on modifying Bike s c lus te r? • What are the pro ble ms fac e d from gove rnme nt po lic ie s ? • What is the de mand of Bike Modific ation Bus ine s s ? • What is the c as h involve d in e ac h de al?

Slide 9: • We tho ug ht it wo uld be diffic ult to approac h the s e pe o ple • They have g o o d working s kills , but ve ry little outs ide e xpo s ure and e ducation • We had to appro ach in different way • Cre ating a mo re like a friend than a outs ide r • By do ing this , we thought we could ge t the information.

Slide 10: • Firs t we appro ac he d Monty of Harde e p auto parts who has two whe e le r s pare s s hop at GP Road. • With his valuable s upport, We got fe w mo re c ontac ts . • Jus t by g e tting a link like this , we were able to me e t pe o ple in this c lus ter. • By do ing this , We we re s uc c es s ful in ge tting the info rmatio n. • we c o nfirme d that there are only 10 bike c hoppers are the re in this c lus te r from Mr.s hajakan, who is the two whe e ler as s o c iation s e cretary

Slide 12: • Jus t to do s o me thing diffe re nt ! • Cre ative ide as that would fetc h re s ults ! • Analyze d that buying race bike s are expe ns ive and pe o ple c anno t affo rd it. • By ve nturing into thes e kind of c re ative are as the y wo uld als o e arn profits • Co uld s e ll the Importe d s pare parts

Slide 13: • Te enag e rs are the one s who are pas s ionate about mo difie d Bike s . • Co lle g e Students - Main c us tome rs . • Pre fe rre d by 18 – 22 ye ars old pe ople mos tly. • The s e c o nd cate g ory is 22-25 ye ars old (rank 2) • Mo dific atio n o f bullets are mos tly 25 – 40 ye ars old.

Slide 14: Kind of age category 15-18 years 18-22 years 22-25 years More than 25 years

Slide 16: • Partial Mo dification – Be twe e n 30 days to 45 days . • Co mple te Mo dific ation – More than 2 months . • Ave rag e pe rio d o f modific ation betwee n thre e to five mo nths . • Pe rio d o f mo s t o f the bike s modification - More than 3 mo nths . • Co mple tio n o f mo dific ation les s than 1 ye ars rare ly.

Slide 17: KIND OF BIKES

Slide 18: KIND OF BIKES • No wadays Pe o ple c an add e xtra gears through mo dific atio n. • Do no t pre fe r to modify 150 c c bike s . • Co me fo r mo dific ation freque ntly – 350 c c bike s . • Pe o ple do mo dific ation of more than 350 c c rarely.

Slide 22: Averag e profit made pe r Bike by the s e e ntre pre ne urs we re be twee n 20% and 30%. Apart fro m this the y als o make bus ine s s by unde rtaking re pairs and mainte nanc e of vario us o the r kinds of bikes . Rs. 1,00, 000 per bike is spent during a month Rs. 80, 000 /- (Cost of spare parts) Rs. 13,000 /- (All mandatory payments) Rs. 7,000 /- (Cash that goes to the owner)

Slide 24: • 60 % o f the Me c hanic s g e t the c as h fro m the o wne r o f the bike as the wo rk pro g re s s e s • 30% g e t the who le c as h in advanc e and us e fo r the wo rk and • 20 % finis h all the ir mo difying wo rk Getting the whole cash in advance Getting the cash as the work progresses Completing the work and then collecting the cash Mr. S ye d’s , CBX Rac ing Co mme nts • Nic he marke t is o nly fo r value d c us to me rs • De taile d kno wle dg e re g arding the pro file o f the c us to me r

Slide 25: EMPLOYEE POLICY

Slide 26: EMPLOYEE POLICY • Starte d with 5 to a maximum of 10 pe ople . • Afte r the bus ine s s gre w, e mploye es we re re duc ed to aro und 3 o r 5. – Starte d their o wn e s tablis hme nts due to gain expe rie nc e . • Increas e d e mplo ye es who had les s e r than 5 e mplo ye e s

Slide 27: SEASONAL DEMAND • No s e as o nal de mands . • But be g inning o f the month has more de mand than e nd o f the mo nth. • Have reg ular c us tome rs who c ome for modific ation. • During rainy s e as ons , c us tome rs c oming up with pro ble ms but no t for modific ation.

Slide 29: EFFECTIVE • Impo rtant as pe c t o f comple ting the s aid Pro je c t. • De le g ate s the wo rk to othe rs in the s ame field s uc h as Cle ane r, Tinke re r, Painte r and s tic ke r. • Can handle 3-4 bikes at the s ame time . DRAWBACK • Entre pre ne ur vis ualize s and unde rs tands the c us to me r’s nee ds • Whe n de le g ate d to othe rs the vis ualization of the s ame g ets diluted. • Mino r s e tbac ks with the time ly delivery of bikes

Slide 30: Outs o urc ing c an be made e ffec tive whe n, • Entre pre ne ur - ke e ps a c he ck on the work done by the o uts o urc er! • Co rre c t as and whe n the de viations take plac e from the c us to mer’s ide a of the re modele d bike . • Co nne cting Time with Cas h !

Slide 32: • Mutual unde rs tanding e xis ts the me mbe rs of the c lus te r. • Mr. Mo nty o f Harde ep Auto Agenc y c aught fire due to s ho rt circuit. • Cho ppe rs de cide d to clos e the ir s hop for the day. • Eac h o ne has their own c ompe tition.

Slide 34: • Parts whic h are us e d for modific ation are the impo rte d fibe r materials from c ountrie s s uc h as c hina, Sing apo re and Thailand. • But mo s t co mmo nly us e d are the one s whic h are impo rte d fro m Bangkok whic h c ons titute s 75%. • Fro m GP ro ad whic h is the hub for two whe e ler and four whe e le r parts as pe r c us tome r re quire ments . • If the c us to me rs fe e l that the y ne e d c os tlie r one s the n the me c hanic s go in for imported parts . • So me time s it als o depe nds upon the s tyle and de s ig n the c us to me r pre fe rs .

Slide 35: • Bulle ts are the o nly two whee le r whic h has a me tal bo dy the re s t of the bike s are all made fiber exc e pt fo r the pe trol tank whic h is a me tal. • It eas y fo r the me c hanic s to go about fixing the s e e quipme nt. • Only c o ns ide ratio n here is the availability whe n the who le bo dy is c us tomize d.

Slide 37: • Majo r part o f bus ine s s in c hindaripe t, GP road and pudupet • B’c o z two whe e le r s pare parts hub is loc ate d in GP ro ad. • Ce ntral part o f c he nnai. • Clo s e to railway s tation both c e ntral and Egmore • Co nve nient in building up a c us tome r relations hip

Slide 38: Fe w me mbe rs are s plit of ove r othe r parts of c he nnai • Mr.S as hi o f varadhan bike works s pec ialize d in bulle ts – lo catio n in Alwarpe t • Re s idential lo c ality • He fe els that ric h pe ople s tay in this are a who are fond of bulle ts

Slide 40: • Go ve rnment res tric tion is to work only till 10pm • Me c hanics ne eds to work e ve n till 12am to c omplete a pro je ct o n time • This is due to s o me s e as onal de mands • Als o time ly de live ry of modifie d bike s to c us tome rs

Slide 41: • No nee d fo r any adve rtis e me nts • Only fe w well known bike c hoppe rs that pe o ple trus t in this c lus ter • Po pularity - mainly due to the word of mouth. • S atis fied c us to me rs , indire c tly advertis e to his friends abo ut the mec hanic • The mo difie d bike s , parked outs ide the works hop attrac ts peo ple

Slide 43: • Mo s tly Mus lims and Punjabi c o mmunity are invo lve d in this c lus te r ! • Ve ry fe w Hindus are e me rg ing who have wo rke d unde r the m

Slide 45: • 90 % - Only Entre pre ne ur's Dec is ion • Family bus ine s s only the he ad of the family take s the de c is io n. • At time s the c o ns ultation from the ir wards are c o ns ide re d. • Exc e ptio n Mr. S ujath of CBX Rac ing c ons ults with all his e mplo ye e s for any dec is ion take n Ac c o rding to him, It is be tter to c o ns ult all the e mplo ye e s be fore having a bus ine s s de al.

Slide 47: • Ano the r impo rtant me ans of e arning ! • Re nting o ut the bike s for various ad c ampaigns and mo vies • Fo r ins tanc e , a mec hanic re nte d one s uc h modifie d bike fo r fair & lo ve ly ad c ampaign, ins ide Satyam The atres in Che nnai. • They take the permis s ion from the owne rs . • They e arn abo ut Rs . 2000 pe r day

Slide 49: The co mmo n re ply from the s urve y was , •De pe nds o n the tre nd and de mand for modifie d bike s . •Dive rs ific atio n o f this clus te r is ne e ded. •Entre pre ne ur’s ward -the pas s ion towards bike s • Ac c o rding to the ir fore c as t, the de mand will c ontinue , the ir wards wo uld be interes te d in taking up this field. • If Ye s ! He c an s uc c ee d in this bus ines s !! EXAMPLE – Mr. S YED AWEAS and Mr. MONTY

Slide 51: • Sto le n Bike s we re creating proble m 3 to 4 ye ars bac k • No w the y try to c he c k the bac kground of the c us tome r • Po lice do rando m c he c ks and ve rify the docume nts • Fo r this purpo s e a photoc opy of RC Book and ins uranc e is taken.

Slide 53: • This c lus te r is an o lig o po lis tic marke t, fe w s e lle rs and fe w buye rs • 2000, CBX rac ing was the marke t le ade r • The pric e was bas e d larg e ly o n c o mpe tito r’s pric e s ! • Entre pre ne urs c o -o pe rate with e ac h o the r in taking jo int ac tio ns • Pric ing - dis c us s e d and de c ide d during the two whe e le r as s o c iatio n me e ting . • S e c re t pric e c ut whic h do e s n’t fe tc h any de mand fo r the m, o nly the c us to me r s atis fac tio n matte rs . • Ke e p the ir barg aining po s itio n s tro ng e r ag ains t the c o ns ume r. • Eve ryo ne has an e qual marke t s hare in this c lus te r

Slide 56: • Go ve rnment has a numbe r of rules on two whee le rs • Traffic po lice me n catc he s - Ins uranc e , Re gis tration Copy, and Po llutio n Che c k • Mo difie d bike s – c hanc e s are c ons ide rably high. • No is y Sile nc ers and the fanc y looks attracts the Traffic po lic eme n

Slide 57: • Me c hanic s make s ure that the y e xplain the ir c us tome rs reg arding the g o ve rnme nt rule s . • Cus to mer is no t bothered regarding the proble ms until the y g et c aught with c ops ! • Cus to mers ye ll and s ay the y are e xploite d. • We as ked the m whe the r they ge t any s igned ag re eme nt re g arding this is s ue ; REPLY - it is all about having trus t in the ir words .

Slide 58: Ac c o rding to o ur s urve y, • 60% o f the Entreprene urs s ay that g o ve rnme nt po lic ie s have an impact on the ir bus ine s s . Problem with government policies Government Policies does't affect their Business

Slide 59: • Bike ’s o wne r ne e ds to go to RTO to ge t the bike e ndo rs e d fro m the Chief Ins pec tor. • The y will c he c k the bikes Chas s is numbe r and e ng ine number fo r ve rification. • The Endo rs e me nt c harge s is Rupee s 1500 pe r bike . • Fac t - No ne o f the Polic e ins pe c tor ac c e pts - mo dified bike is s afe to ride and ofte n the y re je ct the m. • No prope r rules s e t by - government for modifie d bike s . • He nce the o wne r of the bike s , ride the bike s witho ut g e tting the e ndors e me nt.

Slide 60: MODIFICATIONS DOESN'T MEAN BIG INSURANCE PRICE HIKES • Cho ppe rs are failing to te ll the ir ins ure r about mo dific atio n to the ir bikes e ithe r – fe ar the c hang e s would inc re as e the ir ins uranc e pre miums . – the y do no t re alize that the y ne e d to. • A re c e nt re vie w: – many o f the mos t c ommon modific ations ac tually have little o r no effec t on pre miums .

Slide 61: MODIFICATIONS DOESN'T MEAN BIG INSURANCE PRICE HIKES • Mo dific ations that are like ly to be e xpe ns ive to ins ure are : – Some of the bike s like bulle ts , during the mo dific atio n s ys te m would inc reas e the pre mium. • Ins uranc e Companie s c omme nt : “one of the most important principles underlying any kind of insurance is that all relevant information must be passed on to the insurance company. That is the only way an insurer can understand precisely what risks they are covering and calculate a fair price. “

Slide 62: 80 70 60 50 OLD ENTREPRENUERS 40 NEW ENTREPRENUERS 30 20 10 0 1971- 1981- 1991- 2001- Future 1980 1990 2000 2008 years __

Slide 64: • Thes e me chanic s have the tale nt of ve nturing into mo difying bike s into diffe re nt s hape s . • No wadays co mpanies its elf manufac ture s porty and tre ndy lo o king bike s • B’c o z o f this the marke t is going on a re c e s s ion • But in we s tern world bike choppe rs are getting famo us .

Slide 66: • But c us to mizatio n is be coming a ne w trend in eve ry place s . • Pe o ple want s o me thing diffe re nt from others • This will s et as a ne w trend and again the re will be a bo o m in this c lus te r.

Slide 68: • Entre pre ne urs o f this bus ine s s jus t don’t c all the ms e lve s a me c hanic . • Jus t be ing a me c hanic in this field won’t fe tc h a good marke t fo r the m • De s ig ning a bike is more important to s uc ce e d. • This fie ld c alls for a lot of imagination and hard work fro m the part o f the e ntre pre ne ur

Slide 69: • There fo re at all time s it is re quire d to s tre tc h the ir limits o f imag ination and phys ic al boundarie s to the eve r-c hang ing de mands of the market • We fe e l that s o o ne r or late r that this would be a flo uris hing indus try in the ne ar future . “ Bike modification is the art of shaping the bikes to the customer’s desired imagination and enabling them to run in Indian roads. ”